Anyone starting to think seriously about retiring in the near future has likely heard the advice that careful planning as early as possible is the way to go. Though it requires a little extra effort on your part now, self-directed retiremnet planning can not only prevent any missteps when you do decide to retire but can help assure that your golden years go as comfortably and smoothly as you had always hoped. The main areas to focus on when thinking about retirement planning are finances, housing and personal goals, but of these, the financial aspect may be the most pressing. However, prudent financial planning prior to your retirement can help take this burden off your shoulders early.
Whittle Down and Define Your Daily and Monthly Expenses
Living on a strict budget during retirement is the key to not overspending your fixed income, so you may want to go through your current expenses now and figure out what could be cut out and what you need to keep paying. Once you have these expenses defined, you can figure out how much money you’ll need each year in retirement.
Budget for Potential Medical Care Expenses
Unfortunately, one consideration that’s essential for most retirees but that many people tend to push to the back burner until the last minute is the growing cost of medical expenses. As you get older, it’s likely you’ll have to make doctor or even emergency room visits, so it’s important to include a little space in your budget for medical expenses. Make sure you also know how you’ll be getting health insurance during retirement.
Weigh All the Pros and Cons in Choosing Your Date of Retirement
Choosing the exact date of retirement can involve a few different factors, each of which has its pros and cons. If you retire early, for instance, you get more time off to enjoy and spend on the things you love. On the other hand, delaying retirement by a few years could allow you to save up more money and even take advantage of more social security benefits, in some cases.
Start Saving Up as Early as You Can in a Dedicated Account
You likely already have a dedicated retirement account already set up, but if you don’t, now is the time to get started. These dedicated accounts typically include 401(k)s, traditional or Roth IRAs and more. The general rule of thumb is to try to set away 10% to 15% of your take-home income to put towards retirement, since this should allow you to steadily build up a comfortable cushion. However, any amount that you can put away would help. You may also want to consider taking part of your savings accounts and investing safely, such as in stable mutual funds, to help make the most of your money.
You may also want to look for other channels to earn a passive income and save more for retirement. Investing in real estate is one of the best options to grow your money. You can buy a property and earn by selling or renting it out, or you can invest in real estate investment trusts (REITs), exchange-traded funds (ETFs), crowdfunding platforms, or real estate sponsors. There are many options to invest without buying a property outright. Depending on the platform, you can start investing in crowdfunded real estate for only $500. However, make sure to do your due diligence and read authentic ratings and reviews when choosing a platform to trust your hard-earned money with.
Retiring is a big financial step for most people, since it typically means living on a set income every year for the rest of your life. In order to achieve your vision of a smooth and relaxing retirement, you’ll have to engage in some detailed planning now. The sooner you begin to lay out your finances, the more you can help guarantee yourself a pleasant retirement free from constant money worries.Check TechRado for more!
