By Joy Hanke

RetirementWhen you turn 65 retirement is something that is expected and looked forward to. Without the daily job there is now time to travel, relax, read the books you always wanted to but never had the chance, and to spoil the grandchildren. However if you do not plan ahead you might not be able to live such a leisure lifestyle. To evaluate your current retirement plan click here.

What to Keep in MindAs time goes by it is important to factor into your retirement plan the inflation that will occur over the years which will have an affect on your salary. A second major part of the retirement plan is the savings rate that you will have. Below are some rates

Average Inflation Rate: 2.53%

Average Savings Rate: 0.45%

Graph of Inflation

An Example SituationOne of the most important things to do is to start saving your money immediately for your future retirement. You may ask why it is important to start saving immediately and to show why an example will be used with a school teacher. Basic Information: Starting Salary- $38,408Ending Salary (incorporating inflation)- $112,893Estimated time of Retirement- 15 YearsMoney for Retirement per year-$84,670Total Savings should amount to-$1,225,471

The Secret…Start Saving EarlyIf the teacher is wise and starts saving early she will have to save $25,894 a year for a comfortable retirement. However if she were to wait ten years then she would have to increase her annual savings to $34,529. The situation continually gets worse as she waits fifteen, twenty and twenty five years when she have to save $41,165, $50,691, $65,514 respectively.

To calculate your own rates with how much you will have to save every year click here.

What happens if you waitThis chart shows how much of your salary has to be put towards your savings to have a comfortable retirement. As you can see the longer you wait the greater part of your salary is lost for your retirement. More information is available here.

Percentage of Salary towards Savings Here you can see how much of the percentage of your annual salary goes to saving and should you wait twenty five years before you start saving you would have to put 91% of your salary towards savings to have a comfortable retirement. For other details on the benefits of saving early visit here.

The LogicWhen you start saving your money immediately then as seen with the charts you would be able to keep a greater percentage of your money. This means that you would be able to use more of your money for other expenses such as car payments, mortgage, groceries and other expenses and still have a comfortable life. If you continue to wait before saving you will lose the extra money and will have to put an increasingly large amount of your salary into the bank leaving you with less to live on. To read more about this click here.

Sourceshttps://www.wachovia.com/foundation/v/index.jsp?vgnextoid=5239fe532b0aa110VgnVCM1000004b0d1872RCRD&vgnextfmt=default

http://inflationdata.com/inflation/inflation_rate/ConfederateInflation.asphttp://www.money-rates.com/savings.htm#fill-tablehttp://teacherportal.com/teacher-salaries-by-statehttp://cgi.money.cnn.com/tools/retirementplanner/

retirementplanner.jsphttp://articles.moneycentral.msn.com/CollegeAndFamily/

MoneyInYour20s/ToGetRichStartSavingInYour20s.aspxhttp://www.bargaineering.com/articles/start-retirement-

savings-early.htmlhttp://www.baltimoreathome.com/detail.aspx?

dct=54&id=2634&mid=1496&loc=rss