As you think about the future, it could put a smile on your face to think about how you can enjoy retirement when the time comes. You start imagining waking up to the sound of birds chirping rather than your alarm blazing from that nightstand near your bed. Taking a bath can be as long as you want and not hurrying up to beat traffic on your way to work.
Retirement for a lot of people has to do with having a lot more time on your hands to concentrate on the things you love to do. If you have a passion for reading books, a corner of your house can be transformed into a reading nook and with coffee or tea in one hand, you actually get to finish a book you started. In the past, you could be putting off a book for months because you are too tired at night to even lift a page.
Trying to enjoy retirement seems to be a pretty straightforward concept – you just focus on the activities that you love. However, there are challenges along the way before you get to spend your retirement the way you want. Much like every goal you have, you need to work towards it so you can reap the benefits in the future.
Retirement is no exception, especially as a lot of current retirees are going through some financial troubles. The Financial Times shares that one in seven retirees are filing for bankruptcy which paints a bleak financial landscape for the older generation. There are a lot of reasons for this such as an increase in healthcare costs, student loans, and even grandchildren care. These things make it a lot more challenging to enjoy the golden years. Here are a few things you can look into to help you prepare better for your retirement.
Start saving for retirement early
To help you enjoy retirement in the future, you need to plan as early as possible for it. The challenge is to see its value early in life when all you might think about is the present. You want to excel in your career, gain recognition for your work, and be known in your industry. It might also be trying to start a family and your finances at directed at that.
There is nothing wrong with getting ahead in your chosen field or even in starting a family of your own. These are excellent goals you can aim for. However, if all you think about is the present and forget to plan for the future, your retirement might be in peril. The amount you get to use in retirement is closely connected to the amount of time you have spent saving up for it.
The sooner you start saving, the more you have in the end and the earlier you can retire as well. Most companies have 401(k) plans for their employees specifically for retirement use. It is a good idea to put in as much as you can into that account, especially if your company offers a matching program. That is free money on the table. You need to start early with your retirement savings, be consistent with the habit, and increase the amount you save gradually over time. Fox Business shares that one of the biggest mistakes of people is not investing in their 401(k). This makes it all the more important to start saving early.
Diversify your sources of retirement money
If you want to enjoy retirement, you need to find a way to save smart. Starting early is a great first step but you also need to diversify your sources of income to have several sources of retirement savings. You normally start with your day job and with a savings account such as the 401(k) offered by your current employer.
As your salary increases in your current job, you need to increase the amount you are saving up for your 401(k) as well. However, this is not the only way to save for retirement. There are other accounts you can use such as an individual retirement account or IRA. This is a tax-advantaged savings account where the two most common types are Traditional IRA and ROTH IRA where the main difference between the two is when taxes will be assessed.
Apart from this, no one is stopping you from opening an account where you can put extra money for retirement use. There could also be instances where investments can make or break your retirement fund. The idea is to start with an amount you can afford to lose and grow it over time. Remember that investments go up and down depending on the market so you need to time when to put in money and when to cash in on your investments.
Plan out what you want to do in retirement
For you to enjoy retirement, you need to have an idea of what it is you want to do. You cannot retire today and just start thinking about the activities you want to do in retirement the next day. For one, you could end up stressed with all the time you have on your hands and nothing to do. Also, it is important to plan ahead since the activities you want in retirement will affect how you save at present.
If your plan is to travel to and see the world, you need to budget for that cost. The plane fare, accommodations, or do you plan to live in a different country altogether? CNBC shares that there is a range of factors people need to consider before their golden years. Once you have decided on what you will do in retirement, plan accordingly so you can enjoy your golden years.
Live on a frugal budget
You might start to think that you will never enjoy retirement if you constantly have to keep looking at how you manage your money. However, learning how to be mindful of your expenses now can help you ensure your retirement money lasts for as long as you need it in the future. Frugality is not as bad as other people make it out to be.
Once you start frugal living early on, you are looking for ways to spend less than what you need. You are living below your budget and it will take a lot of creativity to pull it off. As you get better in this approach, you can do the same in retirement. Once you do, you get to stretch your money even further by always looking for a way to save money without sacrificing your way of life.
Have a hobby you can earn off from
As you head out to retirement, it will help you fill the time and even earn some extra money on the side if you identify an income-positive hobby. It is priceless to be able to do an activity that you already love in the first place. If it is reading books, why not create one in retirement and have it published? You can also write short stories and sell them online. Why not create a website and publish your works there and, together with an illustrator, create an ebook. The traffic on your site can help you earn some extra money in retirement. All while doing something you love doing.
There is nothing more peaceful in your golden years than being able to enjoy retirement because you planned ahead for it. The key is being proactive and anticipating what you need in the future. This lowers your need to rely on credit which can lead to unnecessary debt.