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This Is How Anyone Can Supercharge Their Retirement

This Is How Anyone Can Supercharge Their Retirement

Whether you’re so far from retirement that it seems like barely a blip on your radar, or you can see the big day circled in bright red ink on your calendar, planning for retirement at any and every stage of your life is essential. From small, incremental changes to big, monumental ones, there’s a lot of value in being an active planner when it comes to your “second act.” Here are 10 ideas for anyone to supercharge their retirement.

1. Start living simply.

This is a life-long lesson for anyone who wants to retire comfortably. No matter how close or far you are from retirement, start living a more simple life now. Scale back on all of your expenses. Each time you’re going to make a purchase, ask yourself if this is a need or a want, and if you’ll be just fine without it. Opt for less living space when possible, and aim to acquire fewer things.

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2. Ask for a raise now.

Earning a higher salary now means that your earning potential for the rest of your life has grown. Don’t put it off another day–if you think you deserve more, then ask for it. If you’re take-home pay is $50,000 right now, and your raise gets you $5,000 more each year, you’ll make $75,000 more over the course of 15 years. You might not notice a big difference paycheck to paycheck, but the amount you can put into savings is significant.

3. Cut back on your expenses.

This is part of living a simpler life. Make it a habit to reduce your energy consumption, buy fewer clothes and take better care of the ones you have, and avoid purchasing anything new. Sources like Craigslist, consignment shops, and reuse stores offer a wealth of new or slightly used merchandise at far lower prices, or even for free. Resolve to not buy anything new for one month and see how far you are able to get. You’ll be surprised at how many things you don’t really need, or how much you can get for free or very inexpensively because it’s used.

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4. Max out your employer matches.

In addition to asking for a raise, make sure you are taking the maximum allowable level for your 401(k) and other employer sponsored investment and savings programs. Whatever your employer’s match is, be sure to meet its maximum. Otherwise, you are basically foregoing free money.

5. Take advantage of AARP and AAA discounts.

Even if you’re not yet retired, people aged 50 and older can become members of AARP and take advantage of the discount programs they offer. At any age, you can join AAA, and find discounts on everything from groceries to travel to entertainment.

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6. Work part-time during retirement.

When the Social Security Act was signed in 1935, the average life expectancy in the United States was only 60 for men and 64 for women, yet the retirement age was set at 65. Now people live 15, 20, or 30 years past their retirement age. Keeping a part-time job during retirement helps you stay fresh, offers you regular income, and keeps you connected to your professional self. There are so many options for professional part-time jobs for people who have a wealth of experience now. You can even find at-home jobs that allow you to work from the comfort of your home, helping you to avoid the costs associated with commuting and professional wardrobes.

7. Downsize your home.

One of the biggest expenses people have is the upkeep of their homes. Not only is a large home expensive, but as you age it will be more difficult for you to maneuver through your house. A smaller house provides you with reduced expenses and responsibilities, and the ability to stay in your home for as long as possible throughout your retirement.

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8. Learn how to cook.

This is a great idea for people at any age. Not only does learning how to cook give you something new to enjoy during retirement, but cooking your own meals is far cheaper than dining out. The added bonus is that home-cooked meals are generally healthier for you, setting you up for a healthier retirement. Cooking at home will help you save an estimated 75 percent on food-related expenses each year.

9. Put off retirement for just two years.

If the idea of working until you are 65 is not appealing, consider what you’ll be missing out on monetarily by retiring early. At 65, you are able to claim full Social Security benefits, whereas retiring earlier means that your overall payments will be lower throughout the course of your retirement. In addition, that’s two more years of bringing in a full salary and two more years to save for your impending retirement.

Lifestyle changes take a while to become habits, so be sure to make these tips part of your daily routine right now. Whether you’ve got a year or 20 years before retirement, it’s never too late to make meaningful changes that will positively benefit the later years of your life.

Featured photo credit: TaxCredits.net via flickr.com

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Brie Weiler Reynolds

Senior Career Specialist at FlexJobs

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Published on June 12, 2018

How Much Money Do I Need to Retire? Find Your Answer Here

How Much Money Do I Need to Retire? Find Your Answer Here

It is never too early nor is it ever too late to start planning for retirement. It ultimately depends on your way of life, where are you living, and whether you need to let go of anything. A successful retirement strategy is to have enough pay to cover your expenses with a little cash going into a savings account for sudden financial needs.

With regards to retirement, we all have an alternate vision in mind. In fact, some think about traveling throughout the world, while some think of a peaceful life with their grandchildren. Whether we get ready for it or not, we will one day turn to retirement age and so, we should be prepared for it. I’m going to tell you how in this article.

Benefits of early ventures for retirement

The way this works is you figure out where you need to live, the amount it will cost you to live there (rent/food/transportation), and the various expenses you will need to account for, like travel/insurance/medical bills and taxes. Many people are struggling to put aside money for their future savings and some haven’t started yet. Think you can put off thinking about retirement? The reality is that you need to start thinking about it right now, and putting aside some money from today.

There are a lot of benefits of taking early steps towards retirement. Utilize the power of compounding, low investment for targeted corpus and you can create more corpus investing the same money:

  • If someone saves $100 every month and starts investing for 30 years at 10% return, initially you will see that within 5-10 years, your investments will not multiply. However, after that period, the corpus will increase immensely with the impact of compounding. The investment period expands the extent of profits increments in the corpus.
  • Suppose there are two people, one aged 30, and the other 40. Both need to resign at 60 with the same retirement objectives of $300,000 USD each. Both will put resources into an investment with 10% of the return. Thus, to accomplish their retirement objective, the younger one needs to save $100 USD / month and the older one needs to collect $300 USD / month. Since the older one has started investing ten years later than the younger one, he will pay more than double what the younger one will pay.
  • If someone saves $100 USD every month and starts investing at 30 years old till 60 and gets 10% annual return, his corpus becomes around $170,000. Otherwise, if he starts the same amount spending at 40 years of age with the same 10% return, he will have around $57,000 USD. He can profit by just investing ten years early.

You can’t invest too much money in retirement during the early stage of your career since you may have different objectives. However, you can increase the investment gradually if you start investing just a small amount.

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Average retirement age

For many people who are nearing retirement age or recently resigned, one of their most significant financial regrets is that they did not focus on saving for their golden years. As per the Consumer Reports study, it demonstrates that only 28% of investors with the age of 55 years or older are pleased with the way they have saved for retirement.

As per the report, The Economic Policy Institute breaks down how much Americans have put away.[1] Since you know that when the majority of people retire, you can subtract your age from that more significant number and check down what number of more years you need to work.

But many retirees go back to work. Some of them do part time job while others do seek for a second career. Some even come back to full-time work and then retire again in a couple of years. So deciding their retirement age could be tricky.

Average retirement savings

To get retirement started, saving is pretty easy, though it can seem complicated. These simple five steps will make you go on retirement now. So, you don’t need to stress over having the same regrets as today’s retirees.

1. Invest 15% for your retirement

Your initial step is to save 15% of your income. This will depend on your gross income and does not include any coordinating assets you get through your employer’s retirement plan.

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It’s sufficient to enable you to achieve your retirement investment funds objectives, but not too much to keep you from enjoying your income today.

2. Utilize tax-advantaged retirement plan

Yes, we utilized the T-word; however, don’t daydream! Split your 15% retirement contributing budget between charge conceded retirement plans like your 401(k) or after-tax plans like a Roth IRA.

3. Invest your money around

To put it all in one place is the most significant risk that you can take with your retirement money. With mutual funds, however, you can invest in the biggest and most recognizable brands as well as that new organizations you’ve never known about but has a lot of growth potential.

Opt a growth-stock mutual fund with background marked by solid returns for both your 401(k) and Roth IRA speculations.

4. Stay with it

Since mutual fund investing is less risky than investing in single stocks, it is not risk-free. You can see your savings grow in the long term as long as you can leave your money where it is and keep adding to it.

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5. Work with an investing professional

It is essential to look for an investment professional, as you must have a lot of queries concerning your retirement plan during 30 or more years of investing,

Never make due with an investment professional who recommends or patronizes you to turn over all your investment choices to them. Since this is your retirement, nobody will think or care about it more than you do!

You might analyze or compare your savings against the average retirement savings for your age group to check whether you’re falling behind or getting towards of the curve. On the other hand, it might be conceivable to hang up the work boots and hit the shoreline with fewer savings if you live easily or below your means.

How to achieve your financial goals?

An ideal approach to achieve your financial goals is to stay focused on what you need for your future, ignore everything (and everyone) else that may divert you. There’s a significant business culture out there that requires you to stay in debt, live for the occasion and stress over your future later on.

You need to start planning for your future from now, not when you have more time or money to invest. You can even talk to a financial advisor for any help. Cooperate to set your money goals and make an action plan to reach them. You can retire younger than you thought you could if you create a project and follow up on it.

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Start planning for your retirement

A lot has changed in the last 30 years; our previous generation had an career goal and they would join either a large private company or a government organization immediately after school or college. Then they would spend the next 38 years in the same organization and the form of provident fund and gratuity. They would retire with a decent corpus and they would later spend the remaining time with their pension benefits. It’s a bit different now, but with the above information, you’ll be well prepared.

Whether you can afford to retire now or not, you need not bother with a retirement calculator to get a rough estimate. You should have the capacity to closely approximate your daily spending habits to figure out how much money goes out the door every year.

Featured photo credit: Pexels via pexels.com

Reference

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