There are plenty of ways to get to retirement, but not all of them are “smart” ways. Getting on the right path can be easier with these tips for retiring smart:
- “Smart” Ways to Retire Tip #1: Create a retirement savings strategy. Consider how much you’ll need to save by looking at what you want your income to be in retirement. Think about how much money you will need to have saved by the day you retire, and then think through what you may need to change in your current saving and spending patterns to get there.
- “Smart” Ways to Retire Tip #2: Make retirement savings a top priority. Rearrange your budget to fit your new commitment to savings and stick to it. Consider eating out less, eliminating frivolous spending and finding other ways to bring in additional income through freelance work or odd jobs.
- “Smart” Ways to Retire Tip #3: Create a general savings account and pay yourself first. Individuals with a healthy savings account are better equipped to cope with emergencies and can avoid dipping into savings earmarked for retirement. Set up an automatic deposit to your savings account each payday to happen before you make other payments or purchases until you have saved at least six months’ worth of expenses.
- “Smart” Ways to Retire Tip #4: Avoid unnecessary debt. This may seem like a no-brainer, but people who take on too much debt can spend years or even decades trying to catch up. During that time, it can be extremely difficult to save for retirement. Do your best to pay credit cards off in full each month and resist the urge to overspend on big-ticket items.
- “Smart” Ways to Retire Tip #5: Pay debt off more quickly than required. Try to pay more than the minimum monthly payment on student loans, car payments and other big-ticket debt items. In doing so, you’ll reduce the amount of interest you pay in the long run, freeing up more income to save for retirement.
- “Smart” Ways to Retire Tip #6: Plan for the unexpected. The last thing you want to do is run out of money in retirement. Consider future dreams and goals. Also consider the potential impact on your retirement income of longevity and unexpected long-term illnesses. Do the math. If it doesn’t add up, change what you’re doing to save more.
- “Smart” Ways to Retire Tip #7: Create a retirement income strategy. Saving for retirement is one thing. Knowing how you’ll turn your savings into income that will last throughout your retirement is a completely different ballgame. Consider how much income you’ll need each month, and which income-generating financial products may help you get it.
- “Smart” Ways to Retire Tip #8: Work with a financial professional you trust. Consider everything a financial professional can help you with prior to committing. Determine if your risk tolerance lines up his or her recommendations. And no matter what, if something feels “off” with a financial professional you’re considering working with, trust your gut.
It is possible to retire “smart,” but it requires careful planning and often some help from a financial professional you can trust. Please Comment on this article if you found any of this information useful.