If you can not answer these 3 questions, your retirement is in jeopardy

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "It is entirely up to you to record enough A financially secure retirement Building a big nest egg has to be a goal for life and you need to know & nbsp;now if you are on the right track to reach your savings goal. Examine the following three questions and, if you can not answer them easily, you may be seriously bothered when you leave the job market permanently. "Data-reactid =" 12 "> It is entirely up to you to save enough for a financially secure retirement Building a big nest egg has to be a goal for life and you need to know now if you are on the right track to reach your savings goal. Take a look at the following three questions and, if you can not answer them easily, you may have serious problems when you leave the world of work forever.

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1. How much should you save for retirement?

If you do not know your retirement savings goal, it's impossible to make sure you're about to reach it. You must therefore determine what is your target retirement savings number. You can do it in different ways, including:

• Try to save 10 times your last salary. This is the simplest approach because it simply consists of estimating your last salary before retirement and multiplying it by 10. But that can give you an imperfect answer because it does not take into account this that you really think that your expenses will be retired.
• Determine the income you will need and go back. You can estimate your projected retirement income assuming that you will spend between 80% and 90% of your last salary once you leave the job market. You can also try to determine how much you think about spending in retirement (it's easier if you approach retirement). Once you have determined the income you will need, determine the size of your investment account to generate it. Experts recommend that you withdraw 4% of the balance from your retirement account in the first year and adjust upward inflation every year. Determine how much you will need to invest so that 4% of it gives you the desired annual income. If you think you need $ 40,000, multiply this amount by 40 to multiply by $ 1,000,000 in retirement savings.
• Use a retirement income calculator: Vanguard and other websites have online calculators that allow you to estimate the income you need to save for your retirement and the size of your nest egg to generate the desired annual income in retirement.

<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Once you know what your ultimate goal is for your retirement investments, use a online calculator to determine how much you will save each year to reach your goal. The amount you need to save to reach your target will depend on your age at the beginning. Remember the you're younger when you start savingthe less you have to save each year to reach your goal. & nbsp; "data-reactid =" 31 "> Once you've set your ultimate goal for your retirement investments, use an online calculator to determine how much you can save each year to reach your goal – the amount you need to save to reach your retirement goal. Target depends on your age at the beginning of your career.Remember: the younger you are when you start saving, the less you need to save each year to reach your goal.

2. Where is your retirement money invested?

It's important to invest the right amount of money in your retirement accounts, but you also need to make sure that you invest in the right investment categories and in the right proportions.

First and foremost, choose the right type of tax-efficient investment account that you will use to store and grow your savings.

For most people, the best way to keep your retirement savings is a 401 (k) plan or an Individual Retirement Account (IRA). By placing your money in these accounts, you benefit from tax breaks that make it easier to achieve your savings goals. If you invested $ 15,000 in one of these tax-efficient retirement accounts last year and you are in the 22% tax bracket, you will get a deduction of $ 3,300 from your taxable income for this year.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "You also want a good combination of types of characters. Investing in If you invest too conservatively, it will be virtually impossible to reach your retirement goals, if you invest too aggressively, you run the risk of losing money.If you invest 10 000 $ per year over 35 years and earn 7%, you'd end up with about $ 1.38 million, a fairly generous nest egg, but if you're too conservative and earn only 4% in annual returns, you'd only have 736,000 $, which is unlikely to provide enough money to retire well. & nbsp; "data-reactid =" 36 "> You also want your retirement account to understand the types of investments.If you invest too conservatively, it will be almost impossible to reach your retirement goals; If you invest $ 10,000 a year over 35 years and earn 7%, you'd end up with about $ 1.38 million, a fairly generous nest egg. Too Conservative and If you only earn 4% in annual returns, you would only have about $ 736,000, which is unlikely to provide enough money to properly retire.

The right combination of investments depends on your age and the level of risk you can bear. But as a general rule, a good rule is to subtract your age from 110 and assign that percentage to the percentage of your portfolio that is invested in equities and then put the rest into more stable investments, such as bonds. So if you're 30, you'll have 80% of your portfolio in stocks; if you are 60, you would only have half of your portfolio in the market.

3. How much do you pay in fees?

Fees can significantly reduce the returns you get, especially when you pay high fees over a long period.

Suppose you paid your annual contributions of $ 10,000 over 35 years of work and generated a return on investment of 7%, excluding fees. If you pay a 1% fee, you will end up with about $ 1.11 million – not quite as good as not paying any fees at all, but there is still plenty to live on. But if you paid 2%, you would only have $ 903,000. And if your fees went up to 3%, you only have $ 736,000 left.

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