You Can’t Rely on Social Security As Your Only Source of Retirement Income

Any person with a full-time job dreams of retirement, whether it’s right around the corner or 30 years from now, retirement visions are dancing in the heads of hard workers all day long. But when it comes to retirement planning, how prepared are you? Are those day-dreams realistic? Only 13% of people feel that they have enough money for retirement, according to MarketWatch. Are you part of the 87% that doesn’t?

We’re here to help ensure that you have a safe, financial future in your retirement – whenever that may be. The general rule of thumb is to anticipate needing 80% of your pre-retirement income. For example, if you make $60,000 a year, you’ll need $48,000 a year to maintain the same lifestyle in retirement. It’s safe to assume that your monthly social security income, which doesn’t fully kick in until your 66th birthday if you were born between 1943 and 1954, won’t be enough. So, the best thing to do is to plan early and plan often.

Create a Spending Plan for Retirement

Spending plans are the greatest gift to a financial plan. Sit down and assess what your expenses are, monthly and one-time, and what your income is. Are you spending more than you’re bringing in? By being aware of your finances, you can better prepare for the future and life in retirement ahead of time. If you’re able to, put 10% of each paycheck into a separate savings account for an emergency, vacations, or the future.

Be sure to visit your spending plan frequently, making any tweaks and changes that you need to.

Start Saving Early for Retirement

A common mistake is that young people are not starting to plan for retirement. Take advantage of the retirement plans offered through your employer, even if you’re fresh out of college, or whether you’ve been working for years. There are many different types of retirement saving options (IRAs, 401Ks, savings accounts, etc.) to choose from; there’s something for everyone. Let us help you decide which savings options are best for you – that’s what we’re here for!

Spend Your Money Wisely Now

Did your spending plan not turn out as well as you had hoped? It’s OK, we’ve all been there! Make adjustments and think of ways to still do things you love while keeping a few pennies in your pocket each month. Whether it’s a DIY gift or project, eating in an extra night each month, or car pooling to work when gas prices are high. 

Live Life…Responsibly

Even though it may seem that in order to maintain a similar pre-retirement lifestyle, during retirement, life will need to end as you know it. When in fact, retirement is when life is just really beginning. Spend time with family, take the trip you’ve always wanted to take, sleep in, and pick up a new hobby; put simply, live life! But just remember, you’re used to more income that you’ll be receiving in retirement. With some pre-planning, the help of your friendly LRRCU staff, and smart saving practices, your golden years are sure to be golden!

Kara Vincent
Kara Vincent

Kara Vincent is the Financial Officer at Lancaster Red Rose Credit Union.

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