Are You Anywhere Near Retirement Readiness

The Social Security system is only getting deeper into debt each passing year. Would you believe that at one time, the Social Security system was thought to be something that could finance the rest of the government? These days though, we can consider ourselves lucky if  they don't ask for taxpayer money to bail the system out. When things are so uncertain, how do you get yourself into a state of retirement readiness for the future?

You mustn't think that this doesn't really have anything to do with you, because if the Social Security system goes bankrupt, it won't be for another 25 years. But that should absolutely bother you. Let's say that you are 50 years old now. When you retire 15 years from now, you could hopefully hope to live another 20 years or more. That would put you squarely in bankruptcy territory. Retirement readiness today means that you have to prepare for a time when there is no Social Security.

The first thing you need to do to get into retirement readiness, is to find out, calculator, pen and  paper in hand, how much you believe you will need in the future, once you retire. It isn't easy to come up with an accurate figure, especially given how no one can really tell how inflation will devalue your money and raise prices all around in the future. You can do a reasonable job by taking the account how old you are, how much you have invested already and how much money you could possibly save.

The next thing you need to do is to look for the right retirement plan. The government and a few large corporations still do offer a proper pension plan. If you are not lucky enough to have something like this coming your way, you don't have to fund everything on your own. Most companies, even if they won't give you a retirement pension, absolutely will help you contribute to a retirement plan and build a fund up. The 401(k) plan would be one such option.

If you're company has such a plan, they'll also probably have a matching scheme - where up to a point, whatever you contribute, they'll match it. It's like free money.

If your company doesn't offer you such a plan, you still have nothing to worry about. There are other possibilities - like IRAs and Roth IRAs.

Whatever money you invest on your own, you have to make sure the that you have a good asset allocation strategy in place. While that might sound like a very complicated thing, conceptually, it's simple enough. It just means that whatever money you have, you need to make sure you know how much to put into mutual funds, how much to put directly into stocks, and how much to keep up in cash.