First Person: Planning Ahead for Retirement

It is never too late to plan for retirement. While most people should start investing towards their retirement once they graduate high school or college and begin the career path, some tend to put it off. I am forty-five years old and am one of those individuals who never gave thought to investing seriously. I have a retirement account at my job and needed to withdraw from it for one reason or another. Now that I am in my mid-forties, I am more serious about my future since I want to retire from my job in the next ten or fifteen years. If you are like me, there is nothing to worry about. Even if you are a few years away from retiring, you can still save up enough money so you can enjoy your permanent vacation from work. All it takes is making some changes and being committed. By applying the following tips, you can set your aim at retiring comfortably.

The first tip is to see if you can afford to retire if you have no money saved up. In my case, the answer is no. My husband and I pay over $3,000 a month on monthly bills, a mortgage, car loans and personal debt. Even though the cost of living is not high in Binghamton, New York, I personally do not think I can afford to retire if I did not have any money saved up. I do not want to sit around the house and knit during my retirement. I want to travel to different parts of the world. Therefore, I have to set some goals.

The second tip is to reduce the amount that you are paying in monthly bills. While some of the bills will not go away, such as the electric and the cable, others will disappear once that final payment is mailed out. Within three years the car loans and the personal debt will be paid off. I have set a goal not to use any more credit cards. While we still have twenty-five years left on the mortgage, after the car loans and personal debt are paid off, we will be paying double on the mortgage payments. By doing this, we will be debt free before I hit my retirement goal of ten to fifteen years.

The final tip is to set up a monthly budget. My husband and I currently have a budget based on our take home pay. The budget is as follows:

35% Mortgage
15% Car-this includes loan payments and repairs
10% Medical/Dental
10% Cable
10% Electric
5% Travel Expenses
5% Groceries
5% Spending
5% Savings

After working in a manufacturing plant for eighteen years, I take home at least $500 a week. That is at least $50 that goes in my savings each week. In addition to my personal savings I invest 7% of my weekly paycheck into a 401k. I am allowed to invest up to 50% and whenever I pay down on the debt, I increase the amount I invest. While I currently have 8,000 invested, I expect that amount to increase to $150,000 by the time I retire.

Retirement planning is not just for the young. People, even those a few years from retiring, can plan for it. All it takes is just a little planning and a commitment. By setting up a monthly budget and saving money in both a personal savings account and a 401k, the future will be brighter for you.