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How to Financially Plan for Your Retirement

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How to Financially Plan for Your Retirement

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    Even if you’re young, retirement will arrive faster than you expect. If you’re not in a career you love, you might even feel like retirement can’t arrive quickly enough. Even more concerning is the idea that if you’re not financially ready for retirement, you could spend your “golden years” struggling to stay afloat. Fortunately, there are ways you can more easily avoid that risk and financially plan for retirement. Here are five issues to consider when you’re making those retirement plans.

    1. Understand the Differences Between Savings and Income

    Having a savings account or other investment vehicle is a great idea. You want to have saved as much as possible before you retire, so you can be ready to stop working and enjoy whatever you have planned in your later years.

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    Savings, though, is not the same as income. If you don’t still have any money coming in, your savings could eventually be depleted. Because you don’t want that worry hanging over you in older age, you need both savings and income.

    One way to generate more income for your retirement planning is by opening accounts that provide you with strong returns over time. Scottsdale Bullion and Coin suggests that you consider transforming part of your retirement investments into a tax-deferred asset through the creation of a precious metal IRA. Precious metals such as gold can increase in value at a much stronger rate than more traditional investment vehicles.

    2. Pay Off Debt

    Debt is a problem for most people, from early adulthood through middle age and beyond. However, when you go into your retirement years with debt, the struggle can become even more significant. Therefore, it’s very important to factor in a debt repayment plan before entering retirement.

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    Cars, homes, student loans, credit cards, and other types of debt should all be paid off before your retirement date. Then, all you need to be concerned with in your later years are normal household bills, along with standard purchases and anything extra you want to spend money on (travel, family, etc.).

    3. Apply for Government Benefits

    It’s important to know what kinds of benefits you’ll be able to receive from the government in retirement. Social Security and Medicare may be very important to you, depending on what other income streams and insurance options you have. However, it’s often best to delay receiving Social Security, if possible.

    Those who put off drawing on their Social Security benefits will get more per month—all other things being equal—than those who claim it early. If you’ve successfully planned for retirement, you shouldn’t have to take your Social Security benefits too early.

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    4. Budget for the Future

    The cost of long-term care is rising, and nearly 70 percent of people who live past the age of 65 will eventually need this type of care. Some will require it for a number of years. With that in mind, you should financially plan for retirement in a way that takes into account as many different scenarios as possible.

    Long-term care insurance can be a good choice for retirement planning. You can also consider investments that will pay strong dividends, as these can be used to pay for long-term care, as well. Assuming that you won’t need this type of care could leave you struggling in retirement, so it’s much better to plan for the possibility.

    5. Attend to Legal Matters – Insurance, Wills, Power of Attorney

    Getting your affairs in order is another excellent way to handle financial planning for retirement. Go through your will and make sure there aren’t changes you’ve put off making. Also, consider what kind of insurance policies you have, how much they’re for, and whom you have for beneficiaries.

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    If you have a power of attorney (POA), make sure you’re comfortable with the person you’re giving control to. If you aren’t, or you don’t have a POA, now is the time to get one ready. The odds are that you’ll enjoy many happy years in retirement, but it’s better to take care of things sooner, rather than later.

    Attending to legal matters early will help ensure that your retirement will be comfortable, and that you won’t have to worry about money as you age. As you get closer to retirement, you can assess how much you’ll have in terms of savings and income. You can also take a look at your debt levels and see what you might need to change to pay off debt before you retire.

    No matter how young you are, it’s never too early to start planning for retirement. If you start budgeting and preparing now, you’ll be ready to live comfortably when you reach an age where you want to retire. Then, you can move confidently away from the workforce and into all the joy and adventure your later years will have to offer you.

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    Featured photo credit: Skloff via skloff.com

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    Published on November 8, 2021

    How To Achieve Financial Freedom With the Right Mindset

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    How To Achieve Financial Freedom With the Right Mindset

    What would being financially free mean to you? Have you made the mistake of thinking that financial freedom requires millions of dollars and decades of hard work? When it comes to our relationship to money, the answers really lie in our mindset. Change your mindset around money and your entire financial outlook will change with it.

    And no: we’re not talking about putting a check for a million dollars under your pillow at night. This is about you becoming a financially free person, in whatever capacity you choose. And that’s really the key: it needs to be defined by you. So many people outsource this responsibility to society/celebrities/the government etc… and as a result never achieve it.

    What if you could identify what financial freedom looks like for you, realize that it is possible to get there in a matter of a few months and then build a road map to do just that?

    Read on, because that’s what we’re going to open you up to. This isn’t about giving you specific strategies “guaranteed to work in five minutes or your money back…blah blah.” This is about awakening you to just how powerful you are, where your blocks lie and how to smash through them effectively.

    Financial Freedom – What is it?

    Well like I said: I’m not going to define this for you. That misses the whole point of this article, but let’s lay out some ideas to get you started.

    Typically, when we talk about financial freedom in the west, we really mean: freedom from needing to work, in order to meet financial obligations. We know that there has been a rise in depression amongst nine-to-fivers, 62% as a matter of fact between 2019 and 2020 in the USA.[1] It’s therefore no wonder that there has been correlative uptick in the search for alternative solutions to finances.

    This depression is largely as a result of feeling trapped, unable to realize potential and being denied opportunity. It is also likely that, thanks to a more global world and social media: we see just how abundant life can be for some; like a carrot dangled tantalisingly close, but just out of reach. We yearn for more meaning in our lives, more excitement and to be able to live on our terms.

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    Finances are (as we see it) the stumbling block and the preserve of the chosen few…not us.

    So to start building an accurate picture of what financial freedom would be for you, begin with what your life would look like if you didn’t have to worry about money. How would you feel if you didn’t have to consider your monthly budget, when putting your hand in your pocket to pay for lunch?

    The point is that a lot of the stress and resulting depression that comes from feeling like a ‘wage-slave’ is down to our lack of clarity on what we actually want. We get caught, focussing on what we lack and that perpetuates a mindset of lack that very quickly is reflected in our reality. We are allowing our subconscious, emotional mind to be bombarded with imagery every day that reenforces a sense that we aren’t good enough. That we do not have what it takes.

    That wouldn’t happen though if we had done the work of pinning down exactly what we wanted in the first place.

    Does Financial Freedom Come at Extreme Levels of Net Worth?

    There is a tendency, thanks again largely to how we are conditioned through media, to think that financial freedom only comes at extreme levels of net worth. What if I told you that is completely ill-founded and untrue?

    Using the standard/assumed definition of financial freedom for a moment; this means that you need enough capital to generate a return that is greater than, or equal to your monthly expenditure. That doesn’t necessarily tell the full picture, but nevertheless; it’s is a good place to start.

    If your monthly outgoings (mortgage, bills etc…) come to $3,000 for argument’s sake, you can achieve that with as little as $108,000 invested over three years.[2]

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    Hardly the millions you had probably envisioned is it?

    Remember: we’re not talking about you living a lavish lifestyle necessarily. If that is what you want; fantastic, it’s certainly achievable, but what we’re getting at here is your ability to meet all of your financial obligations without having to work.

    I’m sure you’re unlikely to find $108,000 down the back of your couch, but it is a figure that is well within reach of most working adults. A $36,000 salary opens you up to borrowing that kind of money, and even if you have to continue working in the short term in order to service the debt and keep up with your bills; you’ll have a clear end goal in sight.

    And you’ll have doubled your income in the meantime, for the same amount of work!

    How To Achieve Financial Freedom With the Right Mindset

    As we touched on earlier, coming at your life from a space of ‘lack’ simply perpetuates more of the same. As I always say: your environment doesn’t lie. Look around you, if you’re dissatisfied with any aspect of your life, you first need to accept responsibility for it. If you don’t, you’re abdicating your power to make new choices.

    You may well have been the victim of circumstance in the past, but how you respond and what you do with that experience is up to you. If you choose to look for the positive, however minor it might be in any given situation – your experience of life will begin to change.

    This is, in essence, what The Law of Attraction is all about. What lies behind it is your reticular activating system (RAS). The part of your brain designed to filter out the (as it sees it) unless information, highlight the important information and prioritize your safety. Thanks to it being part of your primeval/‘lizard’ brain however, it predates the conscious mind, intellect and reason.

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    The issue for a lot of us is that we haven’t understood how to communicate in a way that our RAS understands. We can’t translate our conscious desires and are therefore caught in a loop between two incongruous forces.

    Our subconscious wants us to be alive and it bases its criteria for this, largely on the principal of: same = safe. Meanwhile, your quality of life, passive income, work/life balance etc… are inconsequential. That part of your mind doesn’t give a hoot about the utility bill or being able to afford a holiday.

    It is perfectly possible to show you subconscious/RAS the benefits of financial freedom though, or indeed any other outcome you’d like to see in your life. You just have to speak its language. Becoming debt free and financially free is actually one of the easiest things you can communicate to your subconscious, because you have so much ‘real-world’ experience with money.

    Here’s how:

    1. Start by clearing your mind and being present – find a meditation, visualization or breathing exercise that calms your mind, allows you to focus on the present moment and become an observer of your surroundings. The point of this is to stop all of those thoughts buzzing around in your head that are pulling you back to the past, or projecting you into an imagined future.
    2. Then build a mental movie or slideshow of what your average day would look like, were you to achieve financial freedom. We’re not talking about big occasions, huge wins or events; just an average day.
    3. From your position of present observer – start to observe the feelings that arise as you go about this average day in your new life. Do you feel your shoulders relax and drop? Have you got excited ‘butterflies’ in your stomach? Are you smiling more?

    Learn to recall these feelings at will – this will connect the dots for your RAS and you will soon start noticing a shift. Think of it as connecting with your desired future and pulling it into/towards your present.

    Bonus Hack – Practice Gratitude

    We’ve already discussed how you can start attracting/observing the opportunities that will enable you to achieve financial freedom. This involves a lot of work in order to finesse, but the principals are easy enough to understand. Something that we can all do, no matter what we’re trying to achieve, is practice gratitude.

    Using the same principals that I’ve outlined above: something of a ‘catch-all’ that we can train our minds to produce more of, is gratitude. If we can shift our mindset so that the next time some negative, external and unforeseen event occurs, we are still able to be grateful for it; your entire experience will shift.

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    Not only will you observe more to be grateful for all around you on a daily basis, but you will shift out of a mindset of ‘lack’. All of the barriers that stood in your way before (not enough capital, stuck in a job I hate etc…) they will shift to becoming things that support your desires and goals.

    For example:

    The job you hate, when reframed as the means to support a transitional stage of your life (i.e. enabling you to borrow money to invest) suddenly gives you a resource to be grateful for.

    The added beauty of this is that your RAS doesn’t know the difference between a big win and a small win. You being truly, deeply grateful for your socks (for example) carries the same weight as being grateful for your health, or your spouse. This is why I say “practice” gratitude. You can start whenever you want!

    Look around you right now and find something that you really are grateful for, no matter how small and seemingly inconsequential.

    Practicing this will create a snowball effect. Much quicker than you might think: you’ll be overwhelmed with gratitude for your life and all that’s in it.

    In Summary

    Financial freedom is more within your reach than you probably think or feel. Understand that the limits you’re assuming to be there are largely a product of your subconscious mind, having been drip-fed evidence of that over the course of your lifetime. Changing that might take a lot of effort in the short-term, like cranking over an old car, but the effects will begin to build up quickly and self-perpetuate.

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    Apply this mindset to your financial situation and you will find that it too will begin to ‘snowball’. Financial freedom is closer than you think, so start looking for it today!

    Featured photo credit: Pepi Stojanovski via unsplash.com

    Reference

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