As life changes, it’s more and more important to think about planning ahead. Now, I really have to plan ahead, thinking about my family’s future and my eventual retirement. When you have someone financially dependent on you, every decision takes on extra weight. Today, I would like to share some of the best tactics on how to plan for retirement early so you can live the way you want for the rest of your life.
Start With Realistic Goals
When it comes to financial planning, your goals should be realistic and incorporate everything you want to achieve. You have to be able to write down everything that you wish to obtain. This it the first step to achieving anything worthwhile. Set goals to get a clear idea of the type of lifestyle you want to live, the trips you would like to take and how much that lifestyle would cost. Then, set out the goals for your financial earnings in the long run. You might have to make some give an take to make them realistic. Or, you can always adjust how you live now to live better later on.
Invest Early And Often
In addition to planning, you should start investing as early as you can. When you put your money away into 401K or IRA accounts, you are giving yourself the chance to grow money over the long term. Individuals who start safer investing early are able to earn much more by the time they are ready to retire. Additionally, you can take advantage of the tax benefits that come along with starting to invest in retirement accounts as early as possible.
Pay Off Your Mortgage Quickly
While you are planning for your retirement, make sure that your are building equity. Paying off your mortgage is a great way to secure your future. The asset of owning a home gives you the option to use a reverse mortgage to take money out of your home down the line. Of course, a fully paid mortgage can also have a positive impact on your cash flow, giving you additional savings towards your retirement accounts.
Plan When To Collect Social Security
Using a strong savings and investing strategy, you should try to hold off on social security benefits as long as you can. Ideally, you will have so many streams of retirement income, you won’t need to claim them until you can receive the maximum benefit. Moreover, if you decide to claim social security later on, it could have a major impact on the amount that your spouse receives as well. When planning retirement, factor in an age when you expect to start collecting social security.
Set Up An Emergency Fund
Even before retirement, an emergency fund is essential to your financial stability. In the future, you will want to plan to grow your emergency fund. This way, you can easily pay for unexpected expenses that may come up. Best of all, it won’t impact your retirement planning because you already factored in this fund. Just make sure you don’t use it for anything other than emergency expenses.
Take the steps to plan your retirement early on. Your spouse and family will thank you in the long run. More so, you will be confident in the future and your ability to live a good life well into retirement. Start by setting goals, investing and saving. Then, make some long term decisions and keep an emergency fund along the way. If done correctly, you will on a the right track to a successful retirement.
FYI: I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year. I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home. If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!). Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!