It's Never too Early to Start Retirement Planning

 Posted on May 26, 2014 in Estate Planning

Estate planning covers several other aspects besides deciding what will happen to your assets once you are gone. Planning correctly can help to build and maintain those assets for the future, such as retirement. And, it is never too early to start estate planning.

One of the aspects in which many people fail to plan for is exactly how much will they need to have saved in order to enjoy retirement. However, determining the age in which you want to retire is the first step. To begin, make an estimate calculation regarding how much you think you will need to live on and then factor in what your approximate Social Security benefit will be.

It is also important to factor in life events in your planning. College tuition for children is a big expense, so you need to determine when and how much you anticipate tuition will be. You also need to look at whether or not you will still be living in your current home and will you be making mortgage payments when you retire.

Many couples are living longer these days, so may want to also factor in whether or not you will be financially responsible for elderly parents when you have retired. And it is important to look at any health problems you may also have that could eat up part of your retirement fund.

Various financial planners suggest that people should save between 10 to 20 percent of their income consistently for 30 to 40 years and offer this guideline to follow:

• By 35 years of age, a person should have the same amount as their yearly salary saved.
• By 45 year of age, a person should have three times their yearly salary saved.
• By 55 years of age, a person should have five times their yearly salary saved.

If each person follows these guidelines, he or she will have saved eight times their salary by the time they reach 67 years old.

If you have questions about estate planning, contact an experienced Illinois estate planning attorney today.