Securing your financial independence and wellbeing is the surest way to live a happy and stress-free life during retirement. After working so hard the most of your life, you deserve a peaceful retirement life devoid of financial difficulties. However, this doesn’t happen per wish and requires planning and consistent commitment to building resilient financial portfolios.
Despite the importance of financial security in retirement, few people do plan for this important period. Most people have not even checked how much they need to save monthly for a financially secured retirement life. Studies also show most Americans putting less money into retirement funds.
But according to a registered financial consultant, Samuel J. Dixon, “it’s up to you to plan the kind of post-working life you want whether or not you work with a financial advisor, and that strategizing need not be overwhelming.” Planning your retirement at an early stage of your working career is better than later. For example, if you plan to have a million dollars in retirement, starting your plan at age 30 would give you enough time to reach your target and with a less monthly amount than waiting until age 45.
With the US life expectancy being around 78 years, you may live for about 18 more years after retirement. As such, any poor retirement planning can make a mess out of your life.
Start planning early
A successful plan for retirement starts now! Starting early remains the best option when planning your retirement. You get enough time to save and it is affordable. The monthly savings required to achieve let’s say $100,000 in five years would be less if you start immediately than waiting to start 2 years later. It means that starting early would lessen your financial burden over time.
Save enough
Saving, and saving enough is one of the best ways to secure your life after work. In fact, it should be one of your topmost priorities. Set yourself a retirement financial goal and dedicate yourself to achieving it with consistent contributions. You don’t always need to start with a huge monthly saving target, since there may be other very important financial commitments. Instead, start small and increase the amount with time. If you are a small income earner, the earlier you start to save the better and the less burdensome it becomes.
Aside from saving, you can invest in other businesses that would earn you income after retirement, or any other thing that can earn you a steady income including buying bonds, stocks and gold retirement.
Contribute to other retirement savings plans
Some employers have retirement savings plans 401(k), to which employees contribute for a secured retirement. If your company has such a policy, make it a priority to save as little as you can every month. Most companies do also add up to what workers contribute each month. Joining such retirement plans would lower your taxes since retirement contributions are not taxable. It would be best if you also allow automatic deductions to make paying easier. Enquire about such packages from your employer, and if there are any, take advantage of them.
Have a retirement goal and needs
Retirement needs differ from person to person. Whiles you may want to travel the world and live a luxurious life after retirement, another person may want to have a quiet and private life afterward. As such, the retirement planning and saving needs wouldn’t be the same. Also, you may need around 70 to 90 percent of your current earnings to sustain the lifestyle you live now during retirement. Therefore, having a goal and knowing the accompanying needs would help you prepare adequately and efficiently. If you don’t know how to start, seek financial guidance from an Financial Counsellor For Retirement.
Plan your retirement home
Do you already own a home or you’ve planned to buy one after retirement? What mode of payment will you use, cash or mortgage loan? The choice you make determines the type of preparation and planning you need. If you plan to use a mortgage for your retirement home financing, you should get it now than later. Yes, there is no perfect time or age to buy a home, but I don’t believe you would want to be paying a loan while in retirement. Since mortgage loan repayment is spread over years, the more years you have, the lesser the monthly deductions.
Remember your health needs
Old age comes with a lot of health challenges and a need to see the doctor more frequently than before. You should be deliberate about this, by having dedicated savings accounts for such needs or by buying an insurance policy that covers your health.
Take home
Take your retirement planning seriously if you indeed want a better life after work. Many people enjoyed a comfortable life during their active years but due to poor planning, are in a sorry state now. Don’t be part of this group of people! Save, have a plan, stay dedicated, consider your health and housing needs, speak to an expert when required and you will always laugh to the bank after retirement.