When is the right time to start planning for retirement? It’s not when you’re 30 or 45 or 50. It’s right now, no matter what your present age is.
You can’t start too early to save for retirement, but you CAN start too late. Whether you’re starting your first job as a young adult or are a seasoned professional with decades of work experience, the funds you set aside starting now will make a critical difference in how comfortable you are in your later years.
To help you get the ball rolling, here are 7 tips that can help you make the most of your savings strategy:
1. Know how much you will need to live on when you retire.
Financial consultants offer easy-to-use tools that will estimate how much you will need at a set age, and how much you should set aside on a regular basis to reach that goal. Using one of these calculators can help you to map out your savings strategy. Seeking the advice of a Massachusetts elder lawyer or estate planning attorney can be immensely helpful as well.
2. Set up a retirement savings plan with your employer.
If you work for a company or corporation, then inquire with the human resources department about whether the company offers a 401(k), a traditional pension, or other long-term savings vehicles. Not only do these offer significant tax advantages, the money usually comes directly out of your paycheck, making this perhaps the easiest way there is to save for retirement.
3. Set up a SEP-IRA account if you are self-employed.
If you’re self-employed, then look into starting a self-employed IRA, also known as a SEP-IRA. These are program set up by the government that offer those who work for themselves many of the same advantages that employees enjoy with a 401(k).
4. Create and monitor a retirement savings budget.
Budget how much you’ll need between now and retirement to reach your savings goal. Adjust the rest of your finances to fit around that amount. While exercising this self-discipline may be difficult at times, doing so is essential for enjoying a comfortable retirement. In time you will thank yourself for the sacrifices you make now.
5. Don’t rely solely on Social Security benefits.
Don’t count on Social Security to be there when you need it. To stay solvent, the government has already adjusted the minimum retirement age for Social Security recipients more than once. In the future, it’s possible that benefit amounts and other features of the program will be adjusted multiple times.
6. Set up no-brainer ways to save money over the long term.
Explore ways to save money without reducing your current lifestyle. For example, you may forgo eating out at a restaurant once a week, directing the money you save into your retirement account. Some consumers clip coupons, buy in bulk, and use other tricks to keep more money in their bank accounts. You’ll find plenty of online resources that explain how these techniques work.
7. Visualize your ideal retirement life.
Take some time to imagine all the things you’d like to do when you’re retired. Imagine yourself traveling the country, sightseeing through Europe, or whatever matches your interests and passions. It’s amazing how taking the time to do this can supercharge your motivation, making it easier to save for retirement. Keep in mind the need to plan for final expenses as well. A living trust attorney can offer specific guidance on this important matter.
By following these tips, you’ll find yourself well on your way to meeting your long-term financial goals. Good luck and happy saving!