Dave Ramsey: 5 Questions to Ask Before You Retire
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Retirement: the magical time when you no longer have to work for money. However, the reality might be more nuanced if you don’t carefully plan your finances in advance.
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Protected Income’s Peak Boomers Impact Study reported that two-thirds of peak boomers will be financially challenged in retirement based on their current assets. With more Baby boomers approaching retirement than ever before, this statistic is pretty concerning.
Attaining a comfortable retirement takes hard work, planning, and time. You’ll need to start saving early and often and create a plan to help you reach your long-term goals on time.
5 Questions You Need To Ask Yourself Before You Call It Quits at Work
Dave Ramsey explained that retirement planning means figuring out how much money you need to save for retirement and then putting a plan in place to reach your goal.
Here are five questions you must ask yourself to get your retirement planning on the right track, according to Ramsey
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When Do I Want To Retire?
Asking yourself when you want to retire is a crucial question. The sooner you want to retire, the earlier you’ll need to start saving money and the more money you’ll have to put away. With the average life expectancy on the rise, you might want to consider working more years so that your money doesn’t run out.
What Do I Want To Do When I Retire?
You’ll need to think about what you want to do with yourself after you call it quits at work. For many people, work provides a sense of purpose, fulfillment, and daily structure. Consider taking up a hobby or joining a social club before you stop working. Ultimately, you’ll want to have other activities to keep you occupied when you’re no longer working full-time.
How Much Money Will I Need To Have Saved by the Time I Retire?
There isn’t a one-size-fits-all answer to this question. The amount of money you need to have saved depends on the type of lifestyle you’re looking to have when you stop working. If you’re willing to reduce your standard of living, you may be fine with less money. But, if you want to continue living your same lifestyle, be sure to save as much as possible.
Which Retirement Accounts Should I Use?
There are several different tax-advantaged retirement savings vehicles from a 401(k), which requires pre-tax contributions, to a Roth IRA, which requires after-tax contributions. Different retirement accounts have varying contribution limits and tax implications. Consider working with a financial professional to ensure you’re utilizing the best accounts for your financial situation.
How Much Will I Need To Invest Each Month To Hit My Retirement Goals?
Of course, the more you can save as early as possible, the better. As a general rule of thumb, it’s best to save at least 15% of your gross income for retirement in tax-advantaged retirement accounts like a 401(k) and Roth IRA (more if you can). This is the key to building a solid nest egg for retirement.
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