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Personal finance basics: retirement
For many people retirement is an age that they reach where they stop working and enjoy life. Retirement is only possible if you have put in the financial and life work to set yourself up to enjoy the golden years of your life. Right now we are going to understand the financial basics of retirement.
In order to live a comfortable retirement you should have the retirement savings needed to sustain life not working in your retirement account whether its a 401k or a Roth IRA. One thing many people don’t prepare for is understanding how much life after requirement is going to cost. You may travel more or have increased healthcare costs. No matter what it is you are going to need a massive sum of money, at least 1 million dollars is the general consensus, but you should strive for a much higher amount. To reach this you are going to need compound interest of many investments over the course of a lifetime, ideally, you would start in your 20s. There are instances where people wait, the problem with this is that even with compounding interest it becomes a smaller amount compared to starting earlier even if you contribute more money per month.
There are also many people who aren’t able to save enough. Things like Social Security can help with making up some of the gap, but you should be investing in expensive things like home ownership so you don’t have a housing…
