Retirement is something that everyone should begin thinking about the minute they enter the workforce. This might sound a bit too proactive, but retirement takes careful planning.
And the sooner you start planning, the better off you will be in the grand scheme of things. Every year in retirement savings counts, no matter how small. Consider these tips for a well thought out retirement.
Open a high interest savings account
There are online savings accounts that have great interest rates that you don’t want to pass up. For example, it is free to open an online account with Ally. The interest rates are thought to be unmatchable compared to many traditional accounts.
Of course, there are tons of other options too. You just don’t want to have your money sitting in normal checking account not accruing interest. Be smart about where you keep your money. This will quite literally pay off in the long run.
Budget monthly and set aside funds
To save for retirement, you will need money to save first. Start calculating what you spend every month. What is left over? If you’re spending your entire paycheck each month, start thinking of things you can go without so you do have some money to put in your savings. If that isn’t realistic right now, you might need to start looking at other ways to make money.
A lot of people auto transfer money from their account into a savings account every month. This is an excellent way to automate it and make your savings like a monthly expense as opposed to something you have to scramble to pull together every month. Once you get in the routine, it will be easier to increase that savings amount every month.
Speak with a financial advisor
Having a financial advisor who can plan out your retirement is a sure way to meet your goals. They know the exact science of economic freedom and can get you to your goals in no time. A financial advisor is an investment in a financially sound future for you and your beneficiaries.
There are tons of different levels of financial advisors who can help you regardless of income. They are the experts and can look at what you have versus what your goals are. Perhaps more importantly, they also can help you stick to your plan.
Contribute to a 401K and a Roth IRA
Your company most likely has a 401K option. If it doesn’t, you want to start inquiring about one or looking for other companies. If you aren’t interested in leaving and working somewhere else, you will need to open a Roth IRA.
Anyone can open a Roth IRA. There are annually contribution limits, but it is a great place to save up a chunk of change over the years. Research some of the accounts you want to invest in and open them sooner rather than later.
Plan your retirement realistically
If you want to retire and be comfortable, know what your living expectations are. Make sure to cut costs you don’t need before retirement. This way your living expectations will fall within the budget you are planning for retirement.
With that being said, make sure to save more than you think you will need for your retirement. This is essential to making sure you are prepared for any extra trips or medical bills. Putting away more money than you need will reduce your stress levels by a lot.
These are all ways to ensure a fool-proof retirement. Being this prepared will make your retirement that much sweeter.