Tell future you, "You're welcome."
Retirement. Ideally, it will happen to you, and at a time of your choosing. When it does, all the decisions that Current You made about your money during the preceding decades will become crystal-clear to Future You. Some of those choices will be revealed as masterful; others may be rued. Future You might even find himself having thoughts like, "If only someone had told me that counting on an inheritance was a bad idea." Well, we’re here to tell Current You that it is. And while you’re at it — here are 10 other things about saving for retirement that may not be brought to your attention. Tell Future You, "You’re welcome." To live your life to the absolute fullest, start checking off these 40 Things You Must Do in Your 40s!
You can make up for lost time
You should bet on Wall Street
Fees can make a huge difference to your plans
Saving the first 100k is the hardest
Chances are, at some point in your career you’ll change your employer, get laid off, stop working because of illness, or even take some time out of the workforce. Any of these changes could interrupt the rate at which you're socking money away for the golden years. To keep your retirement plan on track, you may need to park savings in an IRA or taxable investment account until you become eligible for a new retirement plan at work. Even better: Fireproof your life with these 20 New Rules for Successful Entrepreneurs!
Gaps in employment can mean savings falling through the cracks
Don’t rely on Social Security
Thinking of #1 will pay off later
An early withdrawal can be disastrous to your dreams of having a million bucks in your war chest by the time you retire. Whenever you withdraw money from a 401(k) account, you'll have to pay income tax on the amount withdrawn. And generally, those who withdraw money before they turn 59½ are also charged a 10 percent early-withdrawal penalty. Ouch! Keeping an emergency fund outside of your retirement account is a much better plan for a financial cushion.
Early withdrawals mean pain
Have multiple savings plans
Two million dollars. That’s how much you’re going to need to save if you’ make $65,000 a year, plan to retire about 30 years from now and replace 70% of your current income for 25 years. That’s enough to make anyone lose sleep. But rather than get discouraged, your best bet is to think of that princely sum as motivation for saving rather than a than an all-or-nothing figure at which to arrive on your 67th birthday. While it’s good to aim for the stars, a recent survey discovered that the average amount a person needs for a "happy" retirement is around $500,000.