The goal many people in the working world is to retire comfortably as soon as possible. Most people work to live instead of live to work so it is no surprise that people can start planning for their retirement in their 20’s. Saving from this point can allow a person to cut years off of their professional life. The best thing that a person can do is to be proactive about saving money monthly to put towards their retirement fund. The following are tips to help those start saving for retirement as well as investing advice that can help reduce the time that it will take until the dream that is retirement.
Set A Real Budget That You Will Follow Religiously
The first step is writing out a concrete budget next to the last few months of money that has been spent. This can allow a person or family to see where a large portion of their expendable income is going. A person can see subscriptions they could have forgotten about or see an increase in the electric bill due to the weather outside. Budgets are not made to be broken so keep this in mind when setting it so set a realistic one that you are motivated to keep.
Set Saving and Retirement Goals
The Money Alert recommends that financial goals are set when it comes to savings and retirement. Those people who want to retire in the next decade might want to curb certain spending habits. Set a goal of how much money that you want to save monthly after all expenses are paid. For those on a fixed income this should not be too difficult to set a monthly goal that can be attained. Saving a few hundred dollars a month then investing it can add up over a decade and allow a person to retire more comfortably than they had previously thought.
Putting all savings and investment money into the same type of stocks in the same sector can be a disaster. While huge profits are potentially there, the investment could be a huge loss if a certain industry takes a dive. Invest in a variety of both high risk and low risk stocks to maximize earning while minimizing risk. Investment properties have become more and more popular as rental prices in certain areas of the country are astronomical.
Start putting a set amount of money into your 401K with each paycheck to watch this fund grow. This money is not taxable until it begins being withdrawn but there is a penalty for taking this money too quickly. Those who are lucky enough to work for a company that offers employee match on their contributions to their 401K need to do so. This match can help double a retirement fund without having to put an extra away monthly. Some people use this fund as the fund for their later years and their current investments/savings for the next decade or two. A 401K offers peace of mind for many people approaching retirement which is well-needed after working for decades.