Have you started planning for your retirement? If you have not, you are not alone. Most people have not even begun to save money for their retirement. Less than 50% of American adults have more than $10,000 saved and nearly 30% have less than $1,000 saved. That will not be enough to live on. If you have put off making retirement plans for any reason, here are some tips to get you started.
Jump Start Your Retirement Plans with These Tips:
- Think about how you want to live your life after you retire. Do you think you will keep working? Nearly 40% of respondents to a survey put out by the American Association for Retired People (AARP) admitted they expect to work until they “drop.” Another 43% say they will work at least part time. What about you? Does your dream retirement include work? Do you want to open a new business? Build a cabin in the woods? Sail around the world? Think about what will make you happy and start working towards that goal. Your retirement plans should be customized to you and your life. Set your retirement goals and work towards them. If you have trouble deciding what you are going to want to do when you are old when you are still young, just consider the things you like to do now. Sure, when you are 65, playing rugby may not be your favorite thing but you may know that you want to start a business.
- Start saving now. There are tons of commercials for financial services that remind people that it is really never too early or too late to begin planning for retirement. Not everyone has the luxury of needing wealth management services but even if you can only save a little at a time, over time that will add up. Put a little away from each and every paycheck and you can then watch that money grow over time.
- Make a retirement plan and stick to it. It takes real discipline to set a savings schedule and then stick to it but it does work. This does not mean that all of your extra income (when you have it) has to go into your retirement planning but if you plan to save 15% of your income, make it a point to do it. When you are rigorous in your savings 90% of the time it is ok to then spend more on a vacation or whatever every now and again.
- Do not stress about your retirement plan. There is a saying, “life happens when you are busy making plans.” When it comes to planning and saving for your retirement, you should keep that in mind. Things will happen. People get sick. Emergencies pop up. These may throw you off your schedule and plan. Do not let that derail your long term strategy. Expect things to happen and when they do, just manage them as they come and go back to your plan when you can.
- Remember to leave your emotions out of your investing. Different people have different tolerances for risk. If you have a low tolerance for it, when you invest, do not read the business pages every day to see how your investments are doing. When you make your retirement plans, you are investing for the long term and looking at the daily ups and downs of the market can give you a case of sea sickness if you are not careful. Invest and monitor from afar.
People are living longer and longer. A 65 year old woman today can expect to live to at least 86. That means she will have more than two decades of her life to live after she retires, if she retires at 65. That is a long time. While it may be hard to really think about what you are going to want to do with yourself when you reach 65 years when you are only 21, you can start saving. Even if you will work after you retire, you can set aside money so that you can enjoy those years more.