With most of the country unprepared to retire in the next five years, if you’re nearing retirement age, you should be actively working towards how to plan for retirement. The objective is to essentially save as much as you can now to sustain a decent quality of life once your paycheck stops coming in. You’ll need to discern which methods of retirement planning as best suited for you.
Hiring a Financial Planner
Unfortunately, many people aren’t prepared for retirement. They simply don’t know what to expect after they stop working. They know the idea is to save, but have no idea on how to do it or how much they should be putting away. A financial advisor is an expert who can effectively help you plan for retirement. They will help you to develop a savings and income plan. They can also help determine how much you’ll need to retire. As well, they’ll help you protect your assets so that you can live comfortably during retirement.
If you’re nearing retirement and don’t have a clue as to what you’ll need, what to expect, how to increase your savings, and how to protect your assets, it is recommended that you do work with a financial advisor. Although some like to “wing it” as a means of saving immediate money on the services, they end up retiring and quickly having to return to work just to make ends meet.
Investing to Diversify Savings
Most employees have a retirement or pension account through their employers. But the percentage of income saved is often not enough to last during retirement. For this reason, many decide to diversify their methods of saving by investing their money. Buying stocks and bonds, renting real estate, or opening an additional IRA or 401K account are all options for retirement investing.
Some individuals forego investing due to the complexities and risks and instead rely on their employer retirement accounts. However, should you lose your job, your savings efforts go with it. It’s always good to have a backup plan. Investing in a diverse set of opportunities increases your chances to grow your income for the future. If you’re nervous about the risks involved, a financial advisor or investment broker can guide you through the process to minimize those risks.
Get a Second Job or Start a Business
The hopes are that once you work your last day that you won’t have to go back again. Though social security is available it often doesn’t cover monthly expenses. It certainly doesn’t leave room for doing things you enjoy. Realizing this, some decide to work harder now so they can play harder during retirement. Getting a second job, a side hustle, or starting a business are all ways to increase your income and retirement savings.
To put all your eggs in one basket isn’t wise when you’re nearing retirement. While your schedule may be a bit demanding, there are ways to earn income without much effort. Try to find something that you enjoy doing or are good at so it doesn’t feel like another job or chore. It should be more like something fun. It’s about doing more now so that you can have even more fun later.
Create a Budget and Pay Down Debt to Plan for Retirement
Everyone will always have some level of debt. However, too much debt when you’re nearing retirement can result in the need to keep working years later just to survive. Learning to be financially wise now can help to prepare you for a brighter future. Creating a budget of your current household income allows you to find overages that can be put towards saving. Create a budget that includes retirement expenses and income. It should give you an idea of what you’ll need to make in order to survive in the future. Working from these budgets and eliminating debts and overages reduces the amount you’ll be required to pay once you retire.
Budgets may spell out limitations, but essentially they’re tools to help you manage your finances. When created and followed effectively, it can reduce unnecessary spending. That allows you to reduce your debts and increase your savings faster. If you have trouble sticking to a budget, there are plenty of mobile apps that can help. You can use one to sync accounts, set limits, and stick to your budget.
Most people find out the hard way that they aren’t prepared for retirement. This is a direct result of not knowing what to expect and how to plan for those expectations. While you could take the route of living without budgets, relying solely on your employee retirement account, and foregoing the potential to grow your money or increase your income, these methods are guaranteed to result in you running out of money and falling into debt. Get proactive about your future by instead planning, working with an advisor, budgeting, investing, and growing your income.