As part of Financial Capability Month, the State Securities Board has updated its primer on Investing for Retirement.
A guy named Joe reads Investing for Retirement. Future Joe really appreciates it, because he has learned about the different ways a person can save for retirement, from a 401(k) plan offered by his employer to a personal Individual Retirement Account he can set up himself.
Why is Future Joe so pleased? Because Present Joe was thinking about retirement, and one of the first things you think about is what it will cost you to live comfortably when your working days are done.
Some things will probably cost less when you retire: You won't be commuting. Your mortgage may be paid off, or nearly so. Your children may be graduates with jobs, not living in their old rooms. There may be other expenses that will drop as well.
On the other hand, certain things will probably cost more. Health insurance and out-of-pocket healthcare costs top the list. Real estate taxes and property insurance may go up. You may want to spend more on travel, hobbies, or other things you’ve been waiting to do until you had more time. And you’ll still be spending money on food, clothing, and other necessities.
Inflation is a big factor as well: Your costs will increase over time, some faster than others. Each year that you’re retired you’re likely to need more income than the year before.
Learning about 401(k)s, IRAs and other primary sources of retirement income is key, whether you're just starting to save for retirement or you are somewhere along the journey.
Investing for Retirement can help.