Life insurance can help you create an effective retirement strategy, especially if you have young children. A study conducted by the Employee Benefit Research Institute shows that Americans are more unprepared for retirement than they believe.
The EBRI Retirement Security Projection Model® (RSPM), developed in 2003, finds that 40.6 percent of Americans between 35 and 64 are projected to run out of retirement savings early.
It’s wise to set up a retirement strategy sooner rather than later so you can be better prepared for your future. The following tips will help you spend less now with an accountable savings plan:
- Know your monthly expenses and create a budget
- Use credit cards only if you can pay off the balance at the end of every month
- Designate 20 percent of your paycheck to be automatically deposited in a savings account. talk to your bank about transferring so much money per paycheck or month to a separate account
- Pay off debt early; reduce payments as much as possible
- Set up a direct deposit into a 401K or another retirement account
- Purchase a life insurance policy before age and medical conditions progress
- Build up an emergency savings account fund should always cover at least 6 months to a year worth of expenses
Many young people are not as diligent about retirement planning because they feel they have more time to save before retirement age. Young people may benefit from planning for retirement early. Take advantage of low premiums for life insurance and a company-matched 401(k).