No matter how old or young you are, there are things you can do now to make sure you don’t spend your golden years living under a bridge eating from tin cans.
Start Saving Now
Save, save and save some more. Put away as much money as you can. Unless you’re in dire need of cash, stash that next pay raise either in your employer’s 401(k) program or in an independent retirement account. You probably won’t miss it, and you’ll appreciate how it grows over the years. Billionaire investor and Berkshire Hathaway CEO Warren Buffet suggests saving a regular amount at as early an age as possible. He recommends putting money in an index fund, rather than investing solely in the stock market.
Pay Down Debt
Rid yourself of debt. The only debt that doesn’t cause financial analysts to frown is for car and home loans. Work to pay off those credit cards, especially any high-interest store cards – the goal here is to keep as much of your money as possible. Giving to the poor is cool, but giving your hard-earned money to a credit card company isn’t so cool.
Have a Housing Plan
Think about housing. If you’re currently renting and plan to relocate within five years, continue to rent. However, if you plan on staying in the same area, it might be time to buy a house. If you’re close to retirement, some experts say you should take the amount you’re preapproved for and cut it in half. They also advise that you bring 20% or more to closing to avoid paying for private mortgage insurance (PMI).
If you already own a home and need the cash, a reverse mortgage could be just the thing for you. This type of loan allows you access to your home’s equity to pay for monthly expenses. If you think you’ll need more money going into retirement, also consider buying a duplex or other type of multi-unit housing. In the right rental market, your renters could pay for a large portion of your mortgage.
Get Your Health in Order
Before you retire, be sure to get your health in order. Visit the doctor and dentist if you don’t do it regularly. You’ll save money on necessary procedures and prescriptions if you get them done when you’re still on a company health insurance plan.
Plan to Enjoy Yourself
And last but certainly not least, try to figure out what your day-to-day retirement life is going to be like. What will you do with this new free time? Get your hobby on before the day comes and you find yourself wondering what the heck you’re going to do all day. Make it fun. Make it rewarding. You’ve earned it.
Can you think of any other tips for retirement preparation? Let us know in the comments section and we’ll add them to our list!
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