Conventional wisdom advises you to keep your money in indexed investments and rest assured that market forces will grow your nest egg with double-digit returns, allowing you to coast into retirement with ease. But the recession and current volatile stock market can make you re-think your retirement strategy.
Kiplinger offers these suggestions to set yourself on the path to retired bliss:
*Estimate how much money you’ll need. This is no easy feat, requiring you to nail down a potential retirement year, guess at how long you’ll live and how big a spender you plan to be in your golden years. Once you’ve got a figure in mind, you can begin plotting out what it will take to get there.
*Save with a vengeance. Most of the wealth you build over time will come from direct contributions, and the earlier you stash away significant savings, the more time you give interest and appreciation to work for you. Aim to save 15 percent of your income as soon as you can.
*Stay in the workforce as long as you can. The longer you can keep the income flowing, the less you’ll need to have stashed away. If the corporate world spits you out when you’re over the hill, you can consider launching a low-risk business that will keep you in the black.
5 Steps to a Secure Retirement [Kiplinger]