How many of you are looking forward to your retirement? A lot of you I bet, but how will you sustain yourself in your retirement? Read on to know more about retiring stress free. Our general tendency to prioritize our present goals over our long-term goals prevents us from thinking of our financial health post-retirement. We usually tend to conveniently forget about saving for retirement or procrastinate about dealing with it.
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Other reasons why people often fail to save more for their later years include not having a specific budget or precise retirement goal, excessive current expenditure etc. Even if some may considered about retirement planning or actually have a retirement fund in place, they become careless towards it over a period of time. Hence, such savings are generally in poor condition.
This can be changed with some simple and some major changes, so that you can be sure of a financially-secured old age. So, start with these important tips on how you can boost your current savings and add more to your retirement savings. Bring your retirement planning back on track.
Set a Budget –
That new luxury car in the market may have everything you have ever wanted in your dream car! But hold on! Think about its long term benefits. Is it worth all that money, even in the long term? Commodities like high-end cars are luxury buys. They cater more to your wants than your needs. So, choose wisely. Think function over form. This is just one example. There are numerous things which we spend on, today, which cut down on our savings for tomorrow. Hence, it is essential that you set a budget. This will help you monitor your spending pattern, and hence it will be easy for you to cut down on your unnecessary expenditure.
Set Retirement Goals and Stick to them –
You will be shocked by the number of people who have absolutely no retirement goal in place for themselves or even their loved ones. Those who do have a superficial “plan” might actually have just loosely assumed their retirement needs. Do not make this mistake. Set a retirement goal and more importantly stick to it, no matter what! An ideal goal includes the age at which you wish to retire, your current savings, a realistic idea about the amount of savings you would need post retirement, emergency fund, and current investment options to boost your retirement fund. Once you have figured out these aspects, keep working on them dedicatedly.
Monitor your retirement savings –
It is crucial to keep a close watch on your retirement savings. Remember, merely putting money in a jar will leave you with exactly the same amount. Instead, choose investing and grow your fund. Learn about all your investment options and choose the ones best suited for you. Options like (Individual Retirement Account) IRA and 401(k) are specifically built to help you save better and more for your later years. While 401(k) s are accounts provided by your Company, the most common types of IRAs are accounts opened by yourself. The different types of IRAs are traditional, Roth, SEP and Simple. An essential factor to figure in is to frame all your investments for retirement in a way that they become recurring payments. You can plan your needs and then make the best choice. Choosing automated savings plan makes it easier for you to work on your retirement fund.
Contemplate delaying Social Security –
As you get closer to your retirement, consider the advantages of receiving Social Security payment, late. This can bring in huge benefits. 62 is the earliest age at which you can receive Social Security benefits. And 70 is the maximum age till which you can delay receiving the Social Security payment. Thus, if you put it off till the maximum age you can work, up until the age of 70, you will be adding a considerable amount to your social security income.
Make your retirement work for you –
Now that you have plans, budget and investments in place for a healthy pool of savings, make sure that it keeps growing even after your retirement. Besides the financial aspect, you need to consider the social aspect post retirement as well. Because, the warmth of a good social life can go a long way in keeping an old heart healthy!
So act today and act smart. Save more with these smart tips so that you can retire carefree!
Article contributed by Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, AZ. He has over three decades of experience working with investments and retirement planning, and over the last 10 years has turned his focus to self-directed accounts and alternative investments. Rick regularly posts helpful tips and articles on his blog at SD Retirement as well as Business.com, SAP, MoneyForLunch, Biggerpocket, SocialMediaToday and NuWireInvestor