The money division of U.S. News notes that an individual can determine how much money he needs to save for retirement by calculating how much he needs to spend either every month or every year of retirement. An individual should also consider how much health care may cost him when he retires and make adjustments for the money that is no longer being saved for retirement.Know More
Besides accounting for the money that is no longer being saved up for retirement, an individual should also factor in his payroll tax as well as any lifestyle changes that may be made upon retirement.
As of 2014, financial experts predict that a majority of individuals need roughly anywhere from 75 to 80 percent of income before retiring to retire in financial comfort, notes U.S. News. An individual should also factor in the recurring income he receives through Social Security, pension, royalties and rent if he owns real estate property or plans on renting out rooms.
It is best if the final calculation is either zero or a negative number after an individual's income has been subtracted from his expenses. If the calculation is positive, then there is more than likely an income gap that needs to be accounted for because a majority of retired individuals has more expenses to take care of than income, according to U.S. News.Learn more about Financial Planning
To save money for a car, an individual should calculate how much he can spend on a car payment, how much of a down payment he can afford and determine when he would like to buy a car. It is a good idea to have money directly deposited into a separate saving account.Full Answer >
50 is a good age for early retirement if the individual has saved money for retirement, can reduce his retirement expenses, is willing to trade or barter for certain items and services, and can control his expenses, states Forbes. To avoid fees, retirement accounts shouldn't be used early.Full Answer >
An individual should start putting money into a retirement account in his 20s, according to CNN Money. The earlier a person begins placing money into a tax-deferred account the better because compounding-interest requires time to make substantial gains.Full Answer >
An individual can withdraw the entire 401(k) balance in a lump-sum distribution immediately after retirement, says CNN Money. Other options include rolling the money into an Individual Retirement Account (IRA), purchasing an annuity or asking for periodic disbursements.Full Answer >