PHOENIX — This Money Saving Monday 12News is looking at how to best save for your dream retirement.
Whether it’s just around the corner or you have some time on your side, there are some key steps you should start taking now.
Ask just about anyone what goes through their mind when they think about retirement and the answers you get will vary drastically.
Some people have a plan, or at least a vision. For others, it’s overwhelming to think about.
For Ruthie Brown, retirement is in the far distant future.
“I have no idea… retirement is scary,” she said. “My uncle is 74 and he’s still working, because retirement is not enough to survive.”
Sarah Hudelson is already living it.
“I do what I want,” she said. “I go to the gym. I go to lunch with my friends. I go to movies during the daytime. I do some volunteering… so it’s great. I love it.”
And Chuck Via doesn’t know if he’ll ever retire, but he spends his weekends doing what he loves – adventuring.
“I have my fun and I can pay my bills and things,” Via said. “I do put money aside for retirement, but I don’t know if that will ever happen.”
As the cost of living continues to increase, many Americans have pulled back on saving for retirement.
According to a GOBankingRates survey, more than one-third of Americans are not saving for their golden years.
President and founder of Winston and Companies Retirement and Financial Services Winston Stevenson says whether retirement is five or 40 years away, it’s important to take the right steps to ensure you have enough money saved to retire when and how you want to.
“You have to take a hard look at investing because investing that you do during your working years to get to retirement really changes quite a bit,” he said.
Stevenson recommends taking five steps to prepare for retirement, starting with estimating your expenses.
He says you should plan on spending 80% of your pre-retirement income.
“…very realistic because it does take into account cost of living increases and taxes,” said Stevenson.
Next, factor in long-term care.
He says about 70% of people over age 65 will need long-term care as they age.
“$3,500 in independent,” he said. “…$8,500 a month for the memory care unit and up.”
Maximize your savings by doing things like taking advantage of your company 401(k).
“Dollar for dollar,” said Stevenson. “Do it right up to the point where they’re maximizing and look to invest those extra dollars into other things like Roth programs.”
Strategize social security.
“Social Security is one of the single most anchor points for anybody’s retirement,” he said.
And finally, create an investment strategy.
Stevenson says you should have a diversified portfolio that protects you from any unnecessary risk.
“…because a lot of people just get to retirement… and they’re bored,” he said.
But if you do have a plan like Hudelson did, you can be sure you’ll have a successful retirement.
“Because I worked at ASU, I was required to be in a retirement plan, which is a really good thing… I feel very fortunate,” she said.
If creating a retirement plan just seems too complex to tackle alone, there are plenty of professionals out there to help you achieve financial freedom.
If you have any Money Saving Monday ideas you would like to share with us or any topics you want us to cover, be sure to email us at money@12news.com.
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12News+ showcases live video throughout the day for breaking news, local news, weather and even an occasional moment of Zen showcasing breathtaking sights from across Arizona.