Retirement is the finish line we just can’t wait to get to. After fifty years working hard, that break will be exactly what you need. No more commutes, no more angry bosses and no more late nights at the office. Most of us are counting down the days to freedom. Anyone in their middle ages will probably already have some ideas for their retirement. You could be planning to get out and travel like you always dreamed.
Maybe you just have a list of books that you desperately want time to read. Like most, you probably just want to spend more time with the family. Whatever your plans for retirement, you need to have the funds to sustain that lifestyle. Retirement is all about relaxing and forgetting the troubles of working life. You can’t do that if you’re constantly worried about money.
That’s why it’s best to start planning early. If possible, try to get your savings and investments in place while you’re young and let them grow. The key to retiring rich is building up as much equity as possible. Whether that’s through property, investment or possessions, it doesn’t matter too much. When the time comes to retire, you can unlock that equity and enjoy the best years of your life.
There’s no magical secret to retiring rich, I’m afraid. Most of those who enter old age with a healthy retirement pot, saved throughout their life. From as early as your twenties, it’s good practice to start putting money aside. You simply cannot rely on pensions, whether private or state funded. The elderly population is growing rapidly around the world. We’re all living longer and the state certainly can’t keep supporting the pension at the same rate. Likewise, private business pensions are subject to market forces and bankruptcy. Always have your own retirement pot, just in case.
Get out of debt early
Too many people go through their entire lives in debt. In fact, it’s very difficult to avoid it in today’s commercial market. Our economy runs on loans and debts. Mortgages, credit cards, overdrafts and pay day loans are commonplace. Work towards a debt free life before you retire. Get rid of your credit card debt during middle age. Then aim to hit 65 with the mortgage paid off. These are tough goals but the freedom it will give you is unmeasurable. Interest rates and repayments are the last thing you want to worry about during the golden years.
We’re not suggesting that you play the stock market and take huge risks here. Investments are a great way to keep your money earning while you keep working. Think of them like a long term, high interest savings account. Consult a broker early in your life and talk about building a strong, dependable investment portfolio. With sensible investments, your money will continue to grow and increase over time. Keep a watchful eye throughout the investment period. Look for fruitful investments and stay in touch with your broker. They will help you find the best time to sell your stock and buy more.
Keep your portfolio diverse
Even when an investment looks risk-free, you just never know what the market will do. For this reason, it is important to spread your money around various sectors. Your broker will help you find the right investments here. You need to be sure that if one market crashes, you don’t lose your entire life savings. Find three or four dependable investments. Then have a small area of risk that could potentially earn you a lot more.
Consolidate all 401(k) plans and retirement funds
When you begin looking at wills and probate services with KC Trust, you’ll want to leave as much as possible. One good way to ensure that happens is making the most of your savings plans and funds. The 401(k) plan is an important one to note here. This is the retirement plan that most companies provide. In many cases your employer will match your contributions. For that reason you should always maximise your contributions while working. If you’ve worked for a number of companies over the years, you may have a few different 401(k) plans. As you reach retirement, look to consolidate them into an IRA. You’ll get a higher interest and keep the money safe.
Downsize your house
Your big family home may no longer be appropriate for your lifestyle. Once the kids have moved out, the house can feel a bit like an empty shell. Use this period to sell the house and downsize. This has two big benefits. Firstly, you can move to anywhere you want. Use the excuse to find the perfect location to spend this great time you have ahead of you. You could move closer to family, or purchase a house by the beach. It will also unlock a lot of money from your home. It could help you pay off the mortgage and live debt free. It will lower your outgoings like heating bills too. In addition to that, you’ll feel more comfortable in a smaller place.
Reassess how much you will spend
Before you hit retirement, it’s important to work out a new retirement budget. Try to predict how much money you’ll have and work out a plan based on that. In most cases, you should be able to cut down your expenditure significantly. You’ll reduce commuting costs, you could even sell the car. If you downsize, your outgoings will be reduced. Try to make a budget and slowly try to live from it for a year before you retire. Once the big day comes, you can settle down in the knowledge that you can afford the lifestyle.
Follow each of these steps and you should be in a place to retire rich. If not rich, then at least comfortable. It will give you the freedom to get on and live your life. You can do everything you always wanted to. It’s time to put your feet up and start spoiling the Grandchildren!