No matter your age, it’s a good idea to start thinking about your long-term future and retirement goals sooner rather than later. This is particularly vital the older you get, though.
As the global pandemic has taught us, we never know what’s ahead in life, and things can suddenly change, making planning and having backup positions all the more worthwhile. Read on for some retirement tips you might like to start following.
Get Clear on Your Goals
The first step is to work out your goals regarding retirement. Everyone has different values, plans, and expectations. Start by thinking about the age at which you wish to retire and if you plan to go straight to retiring entirely or have a transition period where you work part-time or casual for a while as you start to ease back on your working hours. The younger you are now and the longer you plan to work, the more time you have to invest and save.
Consider, too, where you plan to live when you retire and what the cost of living will be like there, plus what kind of abode you wish to live in. You need to have a good idea of how much money you want to have available to you to spend on not just day-to-day but also travel and other lifestyle expenses, too.
You may want to spend the first years of your life post-retirement splurging on completing some of your bucket-list goals, or you may be keen to move to a remote cabin and live a fairly self-sustaining life. You might also have plans to help support your children or grandchildren in the future with their education, home purchases, child-raising, or the like, which need factoring in. The same goes for your hopes and dreams regarding donating to charities and other good causes.
The way you want to live out your advanced years will greatly affect how much you need saved and the level of retirement planning you need to do now and over the coming years. Keep in mind that we’re living longer than ever these days, and the cost of living increases each year, so you will likely need more income for a longer time than you might initially thinkand thus need to save and invest accordingly.
Work on Getting Rid of Debt
You won’t reach your retirement goals if you don’t kick debt to the curb as early as possible. As such, don’t delay in working on clearing as many of your liabilities as you can. Start with the smallest credit card balances or loans, etc., pay them off entirely, and then move onto the next biggest one. Just be sure to continue to make the minimum payments on all other debt balances, so you don’t get into arrears on any accounts.
Debt racks up high-interest charges, which you want to avoid, plus the more debt you have, the harder it can be to get approved for loans or obtain good terms for them. As such, saying goodbye to debt has multiple advantages. It also helps to reduce your stress levels so that you can be more clear-headed and productive.
Start Saving and Investing ASAP
A crucial part of retiring when you want is having enough savings to do so. The earlier you start investing in intelligent financial vehicles and learning what you need to about different opportunities, the better. While property and stocks tend to be the most popular and well-known investment strategies and indeed can be excellent ones, they’re not the only ways to go.
It’s wise to diversify your portfolio so you don’t have all your eggs in one basket. It helps, then, to put some money into things like bonds, exchange-traded funds (EFTs), and even precious metals. For instance, you might invest in a few 1 oz gold bar products or a cache of silver coins, among other things. Plus, you could invest in a business of your own or via equity crowdfunding and the like, too.
Spreading money across a few financial areas is a smart strategy as, generally, not all investments will struggle simultaneously. This means that losing some money in one place during a downturn can be counterbalanced by making some profits in another one or two areas that aren’t affected during that same period.
Other retirement planning tips include creating a budget and sticking to it, thinking about your risk tolerance level, and doing some estate planning to minimize taxes. It may seem like retirement is a long way off for you or that working out how to make it happen is overwhelming, but all you need to do is start somewhere. Gradually build your knowledge and plan, and you’ll be in a good position before you know it.
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