Another year goes by, and you still have not begun to save for retirement. While it is probably not great that you have waited, it is okay to start planning now. You may have to save more from now to retirement to get where you want to be, and/or plan for your retirement to look different than your original plan. Different isn’t bad, just different. The key is to start planning now.
Look forward
Let’s just start with don’t look back and think, “I wish I would have.” Clearly starting to plan to save for retirement when you are young is better than doing it when you are older as things like interest added on top of your savings will have a greater impact over time. However, can start where you are now, the past is past, leave it there. Focus your energy on where you want to go now.
What does your retirement look like? Now is the time to begin to think through how you want your retirement to look. What do you want to do versus what can you afford to do and when? There are so many possibilities if you are flexible in your outlook and do your research to find the right fit for you.
Where will you live
Where will you live? Do you have a home or apartment? Is your home paid off? Do you rent? Can you stay where you are? Do you want to move to a new location? These are just a few of the questions you should ask yourself as you begin planning for retirement. If you move, how far will you move? If you live in a city apartment where you know it will be tough to survive on a retirement income, consider moving to a smaller less expensive community. There are many smaller communities where the cost of living is less. Do some research but remember to ask yourself before you move: “Will I be happy in the new location?” More than any other time in your life, retirement should be about balance and peace. You may have more money to spend living in a smaller community, but will you be happy there? What is the tradeoff?
Plan your budget
Have you saved enough? If you are reading this post, the answer is likely no, but either way, you should take some time to work through a budget. Once you have a budget, determine if you will have enough income with Social Security and any other income you may have to cover your expenses? If not, here are a few things to consider.
How much can you save now? If you are working, how much can you afford to put away now? If you have debts, according to many financial advisors, paying off your debts should be your first priority. Check out Dave Ramsey’s Seven Baby Steps, they will give you good guidance.
Get rid of those debts
Start paying down debts with the smallest first, then when that bill is paid off, apply the money to the next bill along with what you are already paying. It’s called the debt snowball. The great thing about starting with the smallest debt first is that you get some quick wins. As an example, paying off a credit card with a high balance and a high-interest rate may seem the place to start, but paying the smaller debts first will help you build up that snowball faster.
If you are debt-free, good for you! Just start putting as much money as you can into an investment account. If you don’t have any debt and you are still not saving, it’s time to get started on that retirement plan. Think about what you can do to make your retirement nest egg grow faster.
Work now and later
Get a second job? If money is tight on your regular income, consider getting a second job and put the money into savings. Online work is big, and there are tons of opportunities. Check out groups like Fiverr or Upwork for freelance work, or Virtual Assistant jobs. Of course, there are also traditional part-time jobs too, so look around and you will find something you like.
Start a side business? What do you do for a living? Can you turn that into a part-time business that you can do now for extra income or for the long term to support you in your retirement? My 82-year-old father still works, he has his own business driving people to airports and such. He has a regular clientele that calls him as needed. He loves it. It gets him out of the house, and he earns some extra money so he and my stepmom can do other things.
Be frugal
Cut back on expenses. There are almost always ways to cut your expenses, from Starbucks to the grocery store you shop at, to Amazon. Couponing is still a thing, so you may find savings there if you have the time to look, but you can also use sites like Rakuten or Ibotta to save on shopping.
You’ve got this
The most important thing to do now is to make sure you know your numbers. How much will you get from Social Security, will it be enough to support you and if not, how much extra will you need to retire comfortably. If you need $100,000 by retirement, and you have ten years to go, you will need to put approximately $10,000 per year into a retirement account or $833 per month or less if you include interest. That amount is equal to a mortgage payment or a nice car, so be realistic. If you have not started preparing yet, it may seem a bit of daunting, but you can do it if you work at it consistently between now and retirement.
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