Preparing for retirement

Preparing for retirement

Ensuring you are ready to retire financially takes planning well before the event. Christian Brothers Services partner Vanguard, an investment management company, offers a host of tips on preparing for retirement.

How do you know if you are ready to retire? Vanguard suggests that as you decide when to retire, think about how much money you’re likely to spend each year. Then, check your savings to ensure you’ll be able to meet those expenses.

On average, Vanguard reports that financial planners advise people to plan to spend 75 to 85 percent of their current income once they retire. The idea is that you will be spending less on payroll taxes, debt, retirement saving and everyday expenses like work clothes and commuting charges.

However, keep in mind, what else you may add to your spending, including travel, kid’s college tuition and health-care costs.

Social Security will give you some income, but the rest will have to come from savings. Vanguard advises evaluating your future expenses and adjusting your savings accordingly.

The bottom line is to start saving now and often.

Start early. Time is money. Thanks to compounding, the value of your investment can increase over time when your earnings generate interest and capital appreciation.

Take advantage of your employer match. If your employer offers to match a percentage of your contribution to an employer-sponsored plan, such as a 401(k), contribute at least enough to get the full match. After all, the match is a 100% immediate return on your investment!

Increase your savings each year. Increasing the percentage of your income you save by 1% a year and earmarking a certain percentage of every raise or bonus for retirement can add up to big savings over time. Work toward saving 10%–15% of your annual income (including any employer match) for retirement during your working years.

Pay yourself first. Automate your savings through paycheck deduction or automatic contribution. Once you enroll, you won’t have to think about saving again until it’s time to increase the amount you save.

For more information on retirement planning, contact Retirement Planning Services at Christian Brothers Services at 800.807.0700 or visit

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