An experienced San Mateo financial advisor can offer her or his clients some very valuable retirement planning tips. This guidance can be especially helpful since pension plans and Social Security benefits fall far short of providing enough income to support a person throughout her or his retirement.
According to estimates of the U. S. Department of Labor, on average, an American will remain in retirement for 20 years. Officials also say fewer than 50 percent of adults calculate the amount they will need for support during those two decades. Unfortunately, many people do not prepare adequately for their retirement. During 2010, approximately 30 percent of all the workers who were offered employer retirement contribution options, such as a 401k plans, decided not to participate.
Knowledgeable advisers have suggested some basic methods for preparing for the years following employment. The most critical step is to open a savings account. Workers who have already opened these accounts should continue saving, increase the savings deposits when possible, and avoid taking funds from the account.
To help people understand how their savings accounts can grow, advisers offer the following scenario. When a person deposits 5,000 dollars in his or her savings account annually, with an interest rate of 7 percent, he or she will accumulate 28,754 dollars after a period of five years. After 10 years, the savings account will increase to 125,645 dollars, and following 25 years, it will be at 316,245 dollars. If the person continues depositing money for 10 more years, the account will be at 691,184 dollars.
A person's expected Social Security benefits should be calculated. In general, these federal funds are equivalent to about 40 percent of a person's pre-retirement income. The official Social Security Administration's website has a retirement estimator page.
A competent San Mateo financial advisor is likely to suggest their clients accumulate 70% to 90% of their pre-retirement annual income. This is the amount that has been specified as minimum levels that are required for one to maintain a pre-retirement standard of living.
According to estimates of the U. S. Department of Labor, on average, an American will remain in retirement for 20 years. Officials also say fewer than 50 percent of adults calculate the amount they will need for support during those two decades. Unfortunately, many people do not prepare adequately for their retirement. During 2010, approximately 30 percent of all the workers who were offered employer retirement contribution options, such as a 401k plans, decided not to participate.
Knowledgeable advisers have suggested some basic methods for preparing for the years following employment. The most critical step is to open a savings account. Workers who have already opened these accounts should continue saving, increase the savings deposits when possible, and avoid taking funds from the account.
To help people understand how their savings accounts can grow, advisers offer the following scenario. When a person deposits 5,000 dollars in his or her savings account annually, with an interest rate of 7 percent, he or she will accumulate 28,754 dollars after a period of five years. After 10 years, the savings account will increase to 125,645 dollars, and following 25 years, it will be at 316,245 dollars. If the person continues depositing money for 10 more years, the account will be at 691,184 dollars.
A person's expected Social Security benefits should be calculated. In general, these federal funds are equivalent to about 40 percent of a person's pre-retirement income. The official Social Security Administration's website has a retirement estimator page.
A competent San Mateo financial advisor is likely to suggest their clients accumulate 70% to 90% of their pre-retirement annual income. This is the amount that has been specified as minimum levels that are required for one to maintain a pre-retirement standard of living.
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