For many people, a great retirement means having enough money to enjoy life without altering their current lifestyle. Setting retirement goals is one of the first steps you can take to figure out how much money you need to retire the way you want.
Setting Retirement Goals
Start by making a list of all the things you currently spend money on. Then think about which costs you could cut or eliminate in retirement. For example, you may not need to spend as much money on gas if you're no longer driving to work every day. Next, think about what additional costs you may have in retirement. Here's where setting retirement goals can be most important. You may want to go on more vacations after you've retired. You may want to join a fitness club or buy your dream car or vacation home. Once you have a clear picture of how you'd like your retirement to look, you can start to figure out how much money you'll need.
Assessing Your Current Situation
After you have a general sense of how much money you'll need to reach your retirement goals, it's time to look at your current financial situation. This can mean reviewing your savings accounts, CDs, retirement savings accounts and other assets. You also can use a retirement calculator to help determine how much money you may need to retire. Two websites with good retirement calculators are Bankrate and FinancialMentor. If you discover that you need to boost your savings to reach your retirement goals, it's usually a good idea to get started right away. Most financial experts agree that the earlier you start saving, the better.
Making a Plan
Remember, it's never too late to have a retirement plan. Writing your plan down can help you stick to it and reach your goals more quickly. You can increase savings by both making your existing retirement accounts work harder and cutting down on current spending. You may discover, for example, that you have cash in a retirement account that isn't earning much interest. That cash might grow more quickly in an IRA Online Savings Account or IRA CD at Ally Bank.
For some, conversion from a traditional IRA to a Roth IRA can also create a tax advantage when it comes time to withdraw money from your retirement account. A Roth IRA conversion may not be right for everyone, so it's important to talk with your tax or financial professional to determine if a conversion is right for you. It's also important to consider your spending habits. By revisiting your budget, you may find ways to cut down on spending. The money you save by making small changes to your budget can add up to big savings.
Ally Bank Options
At Ally Bank, you can safeguard and grow your retirement savings with the stability of an Ally Bank IRA CD or IRA Online Savings Account that is FDIC-insured up to the maximum amount allowed by law. Plus, you earn interest rates that are consistently among the most competitive in the country published by MyBankTracker, so you can reach your retirement goals more quickly.
Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).
Ally Bank, member FDIC