Harmoney Finance - Learn how Harmoney helps you save money on taxes, mortgage, and insurance

10 Tips to Building Your Retirement Nest-Egg

One of the main worries most Americans have is will they have enough saved when they hit retirement. Two things are for sure, you want enough money to live a comfortable lifestyle and you don't want to run out of money. Here are 10 tips that can help ease your mind if followed:

1. Try and save 15% of your annual salary toward retirement. This is a rough planning guideline and you should try and save more if possible. A general rule of thumb is that saving 15% of your salary annually will produce assets in your retirement equal to approximately 50% of your current salary.

2. Calculating your retirement income. Account for all sources of income including any investments, Social Security, pensions, part-time employment and any other potential sources of income.

3. If you are behind the 15% target. If you have lagged behind the 15% annual savings target, play catch-up and increase the savings rate above the 15% for the balance of your working life. Allocating any windfalls you receive such as bonuses, inheritances or raises can be a good way to catch-up to the 15% target.

4. Avoid or defer taxes. Contributing to an IRA or investing in tax-deferred annuities can be an excellent way to allocate money to your retirement savings.

5. Delay retirement. We are all living longer now and the nest egg you will need over the course of your retirement is larger than it was for previous generations. Consider delaying retirement and continue to grow your retirement savings.

6. Maximize your retirement plans. If your employer offers matching contributions to retirement plans like a 401k, take full advantage of the maximum match annually.

7. If you change jobs, do not cash out your retirement plan. Roll the proceeds over to your new employer's retirement plan or into a rollover IRA.

8. Diversify. You should diversify your portfolio in to many asset classes and not become too dependent on any one class. This helps you maximize return and decrease exposure and volatility.

9. Determine what percentage of your present income you want in your retirement. A general planning guideline is that you will want 70% of your present income per year over the course of your retirement. It's worth keeping in mind that if you retire at 65 you should plan on living another 30 years for retirement planning purposes.

10. When you retire, plan on withdrawing no more than 4 percent of your savings in the first year. In the following years, give yourself a 3 percent cost of living increase. This low withdrawal rate should ensure your retirement savings will not run out.