A graduate of American University, where he earned his degree in accounting and finance, Barry M. Kornfeld is able to draw on both his education and extensive experience to serve as a financial advisor for senior clients. Working as the principal of First Financial Tax Group, Barry Kornfeld offers clients information about fixed-income alternatives, such as First Position Commercial Mortgage notes (FPCMs), which can help them meet their retirement income needs.
To prepare for retirement, regardless of your current age, you need to understand your income and how it will change once you leave work. Here are some useful tips.
1. Account for the expenses that are currently being covered by your employer, such as health insurance premiums, as these will become your expenses once you leave the workplace.
2. Aim to save 18 to 20 percent of your current income each year so you have a nest egg put aside. According to U.S News Money senior editor Kimberly Palmer, the Employee Benefit Research Institute has estimated that people contribute an average of 7.5 percent of income into any form of retirement savings account, which can leave them unprepared for the prospect of rising healthcare costs and other retirement-related expenses.
3. Account for taxes on all income streams outside of Social Security, particularly if you have a 401k or IRA, as your tax rate in retirement may be higher than you anticipate.