Thinking about retirement when you are in your 20s, 30s or 40s seems a little ridiculous, especially since you won’t be retiring for another 20 to 40 years, so why bother now? The problem is that most people start too late, making it difficult to really amass any money for retirement. Most financial experts say you should start investing in your 20s for the best return, but it isn’t too late if you are older. Use these simple tips to plan for a comfortable retirement.
Start a Retirement Fund
Starting a retirement fund with the bank is a great idea. For example, if you put away $4,000 a year in an account with an 8 percent interest rate, then you will have $1 million when it is time to retire. How’s that for comfort? But, if you are in your 30s, then you need to invest double the amount to get the same return.
Even if you can’t put away the full $4,000, start a retirement fund right now. Put away as much as you can. It’s also good if you need some immediate cash, but don’t rely on it too much until you retire from your job.
Health insurance seems like a weird way to get ready for retirement, but it is actually essential if you want to save money. If your job doesn’t offer health insurance, then take out an individual plan.
The sad truth is that most people will face at least one large medical bill. This medical bill can put you into debt for years, making it impossible to save up for your retirement. Health insurance may be expensive, especially if you need an individual plan, but the savings are worth it.
You have a great job, you are getting more money than you ever have in your life and you want to buy great clothes, eat-out at fine restaurants and you just want to have fun. That’s great. But, most people go too far and they spend most of they paycheck within the day it is cashed.
To prepare for retirement, and for the rest of your life, limit the amount of cash you spend. This helps you figure out how much money you really need to live, and it leaves more money for retirement investing.
You may not know it, but you can increase the amount of money you put away into social security or 401K programs at your job. Consider talking to your payroll manager about putting away about 10 percent of your gross earnings. This may seem like a lot, and you will feel a pinch for the first few weeks, but this dramatically increases the amount of money you will have when it comes time for retirement.
Pay Less Interest
Many debts have interest rates attached to them. This includes credit cards, payday loans and many bank loans. Do your best to pay off debts with interest, as this is money that only feeds the bank or credit card company. Not only that, but having a large debt decreases your credit score, which can make it difficult to get good loans.
Invest the Money
There are many bank accounts where you can tell the bank to invest the money into stocks and bonds. While this may drain some of your money, the vast majority of people get better returns from their investment. It is usually better to let someone do it for you.
Professionals know what stocks to invest in, and the returns are generally safe. You will rarely get a huge return, since safe investments tend to pay the least, but the chance of you losing money is minimal.
Author Bio: Megan writes for Assisted Living Today, a leading source of information on senior care, including information on popular assisted living properties.