Retiring at 55 may seem like a pipe dream for most, but it is possible with careful planning. There are multiple strategies that can be implemented to help you reach a comfortable retirement sooner rather than later. For six steps on how to plan your retirement when you’re close to it, see this article.
Develop a plan and stick to it
Developing a retirement plan is one of the most important things you can do to set yourself up for a more comfortable retirement. There are many different factors when it comes to retirement planning. But, the most important one has a plan. A plan can be anything from a simple list of the things you want to do in retirement to a more detailed financial plan to a written-out list of the things you want to accomplish in the next year. The point is, you need a plan. And it would be best if you stuck to it.
You don’t necessarily have to have a huge fortune to retire comfortably. You just have to save, invest and plan. The things to consider are these:
- It’s never too late to start saving for retirement. It might be too late to start saving for retirement when you’re 55 years old, and you haven’t saved a dime, but if you’re younger, you still have time to build up your nest egg.
- You need to save at least 10% of your income. You don’t have to save at least 50% of your income like your parents’ generation probably did. It just doesn’t make sense when you’re living through the greatest bull market in stocks ever.
- You need to invest in a mix of stocks and bonds. You don’t have to be a genius to invest in individual stocks if you have the time. But most people don’t have the time, so they invest in mutual funds.
- You need to plan for contingencies. What if you become disabled and can’t work? What if you have children and need to pay for their college? What if you don’t want to outlive your assets?
- You need to know how much you’re spending now. You don’t need to know how much you’re spending on your cable TV bill, but you should know how much you’re spending each month.
Start Saving Early
Saving money for the future is a difficult task. The best way to save money is to start saving early. The earlier you start saving, the more time your money will have to grow. If you start saving at age 25 and save $100 per month, you will have $273,6829 at age 65. If you wait until age 35 to start saving, you will only have $18,9398.
Most of us know that you need to plan for a comfortable retirement, but we don’t start saving early enough. While it is not too late to start saving for retirement, it is a good idea to start saving as soon as you can. If you start saving early and invest your money wisely over time, you could have quite a nice nest egg by the time you retire.
Investing in a tax-advantaged account can be the best way to maximize your returns
The tax-advantaged account is just another name for your IRA and 401k accounts. These two types of accounts are designed to lower your current taxable income and allow you to invest more. The biggest benefit is the tax savings you can get on the money that you invest. If you invest $10,000 into a 401k plan and your income tax rate is 25%, then you are only taxed on $8,750. If you are investing in an IRA, then the tax is deferred until you withdraw the funds. This is a huge benefit, especially if your tax rate is higher when you retire.
With a Roth IRA and Roth 401(k), you pay taxes on the money today, but all withdrawals in retirement are tax-free. You also won’t have to pay taxes on any interest or dividends earned on your investments once they’re in the account.
Find the right retirement assisted or independent home according to your style
Assisted living communities can be a great option for seniors who need help with everyday tasks or medical needs but don’t need to be in a hospital or nursing home setting. While assisted living can also be a great option for seniors who are still relatively independent, it’s important to understand the different types of assisted living communities available, like the best retirement villages in Melbourne, to find the right one for you. Whether it’s a gated community, a senior living community, or assisted living facility, assisted living communities offer you the chance to be comfortable and independent while having a helping hand if you need it.
Pick up hobbies that allow you to keep being productive and active into old age
Retirement doesn’t mean you have to give up doing the things you love. You just need to find hobbies that are less physically demanding. You don’t have to give up your favorite activities. As long as you can do it with less effort, you can continue doing it when you retire. There’s no need to give up the hobbies you love just because you are older. You just have to find ways to do them in a more comfortable way.
Take care of your health and make as much money as possible while you can
You’ve probably heard it before: “Save your money. Save it now. You never know when you might need it.” That might be true, but the fact is you’ll need money to live on, and you’ll need an income to save. If you’re planning for a comfortable retirement, take care of your health and make as much money as possible while you can.
Your health is the most important thing you need to take care of. If you are not healthy and in good shape, you will feel tired and powerless to do the things you want to do. And if you are not healthy, you will not be able to make as much money as you can. When you are healthy, you will also look good and confident, and people will perceive you as a leader. In reality, most retirees are finding that if they want to have a comfortable retirement, they have to work for it. The time to start planning for your retirement is now.
