Part of smart financial planning includes preparing for retirement. When you’re already contributing to your retirement accounts, how else can you prepare for a comfortable retirement?
Here are a few things to think about as you focus on retirement preparation.
Make a plan.
The first thing you should do is develop a plan. When do you want to retire? How much can you comfortably live on? How much money do you have in your retirement accounts now? These questions will help you decide how much you need to put away each month for retirement to reach your goals.
If you don’t know where to start, I highly recommend visiting a financial advisor. Ask for recommendations from family or friends, or talk to your benefits representative at work. Some employers even offer this as a service.
Spend instead of save.
Yes, you read that right—instead of saving extra money (assuming you are already contributing to a 401k and have an emergency fund in place), consider putting your excess towards paying off your debts. About 41% of retirees between the age of 64 and 74 have mortgage debt. Think of how much money goes towards your mortgage and other debts each month and how much easier retirement would be if you didn’t have that burden hanging over your head.
Make saving automatic.
Budget how much additional money you can afford to go towards retirement savings, and then have it automatically withdrawn and sent to your chosen account. In my experience, this is one of the best ways to save. Out of sight, out of mind!
Branch out.
Your employer’s 401k is a good place to start putting your retirement savings. But what do you do when you max out your contributions? Roth IRA and traditional IRAs are also good places to start putting your money. You can also open a mutual fund and have your funds diversified through stocks, bonds, and other securities.
Get aggressive.
Depending on your goals, you may want to take a more aggressive approach to your preparation with some unique ways to save for retirement. This could be anything from downsizing to a smaller home or one car instead of two, moving to an area that has a lower cost of living, or taking on a part-time job to save more money.
Your golden years should be relaxing, not stressful. Taking the time to figure out a retirement plan of action and then acting on it will help ensure you can enjoy your well-deserved retirement years.
Posted in: Career and Work, Retirement, Saving Money
Tagged with: early retirement, financial goals, financial independence, financial planning, paying off debt, retirement, retirement planning, saving for retirement, saving money
