There is no need for a long introduction when it comes to retirement planning. It shouldn’t be a surprise that this should be one of the reasons why we save, after all. Keep in mind these 5 essential retirement planning strategies:
You start NOW
If you are earning a monthly salary, you’re qualified to start making retirement plans. A lot of people have the misconception that they should only be taking care of their retirement when they’re older, but that is simply not true. Overnight cramming is not the way to go when it comes to this particular issue. You cannot be in your late 50s and squeeze planning your golden years into a short timeframe. It is simply impossible. Hence, the best time to start is the moment you receive your first paycheck—YES, as early as then!
Why so? The earlier you are able to plan, the bigger room you will have to make adjustments and explore your other options. When you’re near the end, still too occupied with trying to make ends meet, you’ll always be wondering, “What if…?” To save yourself from future regret and wrong decisions, the best time to start planning your retirement is now.
Live below your means
To be able to save more, you simply have to spend less… and less… and less. If you keep on compromising your budget to make way for the wants, you’ll only find yourself deep in debt when you retire. As much as it’s appealing to buy everything you want now, contemplate on this: do you want to live the remaining years of your life suffering and worrying over a debt you’ll never be able to pay? Don’t you want to have control about how you’ll live your life until the end?
Don’t shy away from thinking that you deserve a comfortable and happy retirement and this is only possible by your hard work when you were younger.
When you’re on your senior citizen stage, you’ll be having twice the fun if you’ve got financial independence and freedom—and that’s always worth saving for!
Explore passive income options
When the time comes that you stop receiving a monthly paycheck, don’t you ever wonder if you’ll outlive your retirement fund? What if you encounter emergencies that will immediately use up all your savings or your 401(k)? There’s no way to tell what will happen in the future, so how can you be certain that you won’t run out of a steady stream of income?
There are cost-free ways wherein you can start planning for your future. For example, you can start investing in the things that you love, things that you think you’ll be doing even when you’re old. For instance, if you’re an aspiring writer, you might want to try blogging. How about investing in a second business? The sky is the limit!
While you are young, keep in mind that you can make big risks in financing high-risk investments. Although, you should also put your money in low return investments. Use an 80%-20% allocation. Yes—it’s a must that you don’t put everything in one investment so that you always have a fall back if either fails. The thing is, the younger you are, the more that you are able to recover and earn your money back.
Keep pension off your mind
For now. Thinking it will save you from financial worries when you’re enjoying retirement presents a false sense of security. A pension is not enough to cover all your expenses. Your social security might give you enough to put a table on the food, but what about other expenses? Instead of thinking that it should be your main source of income, consider your monthly pension as your extra money or let it go to your emergency fund.
Still, it is a must that you know which benefits you have to take advantage of once you become a senior citizen. For instance, you should know the right time to use your 401(k). Withdrawing your retirement fund too late can lead to huge tax fees! Hence, don’t miss a payment and don’t carelessly borrow from your 401(k)!
Don’t think that you HAVE to retire
When you reach your late 30s or 40s, you might already be fantasizing about retiring the moment you reach your late 50s, because why not? Or it may be that you’re already near senior citizenship and you think that you can still do your tasks efficiently, but you feel that you have to retire because you’re simply too old? The truth is, why stop?
Retirement does not have to be the end of your career. Don’t let ageism stop you if you can still work another day! To keep yourself going, quote the famed actress and comedienne Betty White, “Retirement is not in my vocabulary. They aren’t going to get rid of me that way.” As mentioned above, there are so many unpredictable things that could happen to you, and you might as well be prepared with a secure monthly income.
Debt and Retirement
Planning for retirement can be a tricky thing for all ages; younger people think it’s too soon, and older people think it’s too late. The most important thing to consider is to avoid postponing your planning for another day. Saving up to pay for your debt is a good idea, but also saving for a luxurious and problem-free retirement is even better.
That’s why when it comes to your debt, I advise you to take heed from a reputable debt relief company like Financial Rescue LLC to help you with your financial burdens. Let us assist you in wiping out that debt with our trusted debt settlement programs. The earlier you get rid of that debt, the earlier you’re set to make those retirement plans work to your benefit.