It has been said that he who fails to plan, plans to fail. In the world in which we live, it’s all too tempting to focus on the here and now, rather than peer into an uncertain and somewhat frightening future. When it comes to retirement, however, the less light you choose to shed on your later years, the murkier and more foreboding they become. Whether you are starting your first job or winding down your last, here are 5 things you need to do to ready yourself financially for retirement.
1. Start Saving Today
Few people in their twenties, thirties, or even forties spend the time or show an inclination to start thinking about retirement. Work, kids, hanging out with friends—it’s all you can do to just keep the pace. However, this is the best period to start putting money away for the future, while your earning potential is climbing and time is on your side. The more you can set aside while you are young, the better—that money will continue to compound over time and be there when you really need it.
2. Invest Wisely
Setting up an investment plan designed to benefit you in your later years is just as important as saving money while you are young. Distinguishable from the rest of your financial portfolio, your retirement plan features accounts such as a 401k or an IRA. These types of plans are fed by contributions from earned income, which grow tax-deferred over the life of the account. No matter what you do for a living or how much you make per year, if you are a working adult, this is something you need to establish as soon as possible.
3. Put Health First
It’s always when you have good health that you take it for granted, or find excuses (like long hours at work) to push preventative healthcare down on the list of priorities. However, taking good care of yourself now is a winning strategy in planning for your future, as you will not only be fit today, but able-bodied in your later years. Most importantly, by seeing your doctor regularly, getting your heart pumping a few times a week, and eating right, you’re doing what you can to protect against medical pitfalls that can limit your ability to earn and save, or burn through your retirement savings in one fell swoop.
4. Draw a Plan
When creating a thorough plan, sit down and consider as many factors as possible, including determining at what age you would like to retire, and how you envision living the rest of your life. You need to come up with an amount of money that you will require per month to meet your estimated expenditures. Calculate how much you need to save, along with any pensions or social security benefits, to meet your goal.
5. Live on a Budget
If you aren’t yet, it’s highly advisable that you experience living on a budget, much like the one that will be your reality in your retirement years. Not only will it prepare you for the future, but it can also shed light on how, why, and where you spend money, thus exposing ways to be more efficient. With the money you save, you can increase your efforts to get ahead, doubling down now on a bet that’s sure to pay off when you need it most.
There’s nothing wrong with living life in the moment, but it’s crucial that you also begin to plan for your future. By getting your savings in order, setting up the appropriate investment accounts, and having a solid plan, you ensure that your golden years will be rewarding ones.
What other tips can you offer to help prepare for retirement?: Is Flex-tirement the New Retirement?Featured photo credit: A happy senior couple sitting on the front of a sail boat on a calm blue sea via Shutterstock