Have you considered saving for retirement? How will you fund your “travel or renovation projects” and “ideas” once you’re at the age of sixty plus?
The common opinion is many people think their retirement is too far away, they won’t need much money to sustain a living and the government will help them out. Life doesn’t get put on the back burner once you turn sixty, in fact sixty is starting to sound younger and younger these days and here’s why!
Think of current celebrities who are at the golden age of 60: Susan Sarandon, Meryl Streep, Liam Neeson, Arnold Schwarzenegger, Oprah and the list goes on. They’re thriving with success and tons on the go and we continue to see them in numerous projects. People tend to not settle for less, regardless of having a celebrity status or not. If you’re not settling for less now, there is a very high chance you won’t settle for less when it comes to your retirement life, therefore planning is an absolute must.
The following tips are geared towards the millennials, people born between 1980-early 2000s. The typical millennial most likely:
- has no major financial support from parents
- does have school debt
- just graduated – or just found a full time job – or is still searching for one
- starting to think long term
Steps to Retiring Rich
1. Save Little Save Often
Saving a lot and often simply isn’t a choice when income is scarce and bills are pouring in. Saving a little bit at a time will ensure your savings are still accumulating rather than sitting on a big fat zero. You can gradually increase the savings amount as your income increases in time. Set up an automatic savings plan with your bank, where a specific amount will be transferred from your checking to savings every so often.
2. Save For a Real Estate Down Payment
Now most people are in different living situations, so this may not be as easy for some. If you’re currently living with your parents take advantage and save, save, save. You will be super glad you did. Once you’re out on your own, saving money will be a luxury you ono get to do hopefully once a month. Saving for a downpayment will get you ahead in retirement planning because the earlier you can attain a mortgage the earlier the mortgage will be paid off. Once retired you can downgrade your property for a smaller house or condominium and profit. Some properties require as little as 5% downpayment. I purchased my first condo at the age of 23 with $10,000 down. Shortly, I rented it out to someone else, and now the tenant is covering my mortgage for me.
3. Enrol into a 401K/RSP
If your employment offers a 401K or a RSP (Retirement Savings Plan) contribution then I would strongly recommend you enrol. Even if it’s $10 off a paycheque these funds’ growth can be significant once you’re ready to retire. Compound interest adds up with continuous contribution and growth it’s easy to see the benefits long term. Just don’t withdraw! The taxes and the lost effort put into saving the funds are simply not worth it. Wait it out until retirement to avoid getting penalized by the IRA.
4. Focus and Train Your Inner Dragon
Develop your abilities, not every person is good at everything, but every person is good at something. Retiring comfortably is not an option for someone who is flipping burgers all their life. Develop your abilities and make money doing what you are best at.
Growing up, my brother was always sitting at the computer, researching stuff about websites, great ideas, blogs, new social networking phenomenas, he got friends together to work on a business plan for a website but then all of a sudden he enrolled into a chemistry major at the local university. After struggling for a year, he ended up switching to I.T. (Information Technology and Computer Programming). Of course this major made more sense, it’s what he’s been doing for most of his life, it’s not only his hobby but also his talent.
Sometimes we take our abilities for granted because the society may guide us to be something else like a doctor or a lawyer. There is certain class and respect that is associated with these careers, which can be tempting. Of course there is absolutely nothing wrong with becoming any of these professionals but only if your heart is in it and you truly feel it is your calling. Don’t abandon your abilities for the unknown.
Once you are doing something that you love and you’re consistently reinventing yourself and pushing yourself for more, you’re bound to make the money you need to retire comfortably.
5. Consistency Is The Answer
Saving on a consistent basis is the key to accumulating wealth. If you skip a month here, and then the holidays come up and you skip a few months there then you’re also holding off your retirement date a few years too. Saving on a regular basis is what will put you aside from others. It will also earn you compound interest (interest on top of interest) depending on where your retirement funds are invested.
Have you started saving for your retirement yet? What has been your strategy? Share below!