Saving for retirement should be everyone’s number one priority. And the best time to start is now. Don’t wait or procrastinate or you might regret it later.
If you’re planning to start saving up money for your retirement, or even better early retirement, you need a good and proved plan. Luckily, I have the right plan for you. Follow these steps to get you on the right track to save enough money for retirement.
Take a closer look at your situation
This first step might be a difficult step to take because it’s difficult to admit that your situation is worse than you initially thought. But it’s nonetheless a necessary step to save for retirement.
Look at how much money in your bank account, and what other investments or properties that you own. And think how much you have saved up and can contribute to your retirement, this includes 401k or 403b. But don’t include your emergency fund or money for bills or other expenses. If your situation is worse, then accept it for what it is and start working from there.
Take a closer look at your sources of income
After you get the bigger picture of your situation, it’s time to take a look at your sources of income. These sources of income can be your job, part-time jobs, savings, investment, etc.
Let’s say you don’t have retirement savings, but you get benefits that come from your job. These benefits depend on your career, length of work, and age. Also, these benefits may be your only source of retirement savings. If you’re covered by a pension plan, that should also count toward your monthly income.
Set up retirement goals
The word retirement is pretty flexible. It can mean anything from relaxing every day to chasing your passion. So, it’s important to know what the definition of retirement is for you. Some people can only retire with a lot of money and some people don’t need much at all, because they can still enough money while retired.
Let’s say that your retirement means that you’re downsizing your assets to reduce expenses. Maybe you want to live somewhere quiet and cheap, in a modest-sized house. This kind of retirement is going to be completely different from retirement that involves permanent vacation in the Bahamas.
To avoid confusion, make a plan about your expected spending habits once you retired and how long your retirement is going to last. Typically, retirement could last for around 30 to 40 years, obviously the longer the retirement is the more money you’re going to need.
This brings us to the retirement age. Retirement age is also flexible and different from person to person. You can retire from the age of 35 to 65 or 70. Retiring early means that you’ll have to be in retirement mode for at least 3 decades. Retiring early might sound good for a lot of people, but it’s often not possible due to many reasons. And it’s not just about the money, you should also take care of your health while you’re retired.
Of course, you should always keep the plan realistic. This way you will know what to expect and how much money you need to fully retire and can actually achieve your plan.
Talk to a financial advisor
Last but not least, you can always to a professional about your retirement plan. Money management isn’t easy, and you could slip up at any moment. To minimize that risk, why not let a professional handle it for you?
A good financial advisor can help you build your retirement portfolio and secure your assets in a risk-free investment. They can also do more than that by providing advice on planning your estate and wealth,
But of course, their services don’t come for free. Typically, a financial advisor charges about 1% of your total assets managed and you’ll have to pay them annually. And this is the best way to get the services of a financial planner. Because the size of your portfolio is small, then the fee will be small as well.
Retirement is always the end goal
Retirement is like a reminder for everyone that they’re not going to work forever. There will be a time where you don’t want to or can’t work for a living. Or perhaps you might want to chase your dream and passions, even though you won’t earn enough money. And your retirement savings are your only solution when it finally happens.
As I said, the best time to act is right now. Don’t delay your retirement planning further. The earlier you act the more time you have to prepare.