There are a lot of concerns about the health of social security funding in the coming decades. As you plan for your life after the world of full-time work, it's a good idea to build your financial plan without counting on social security. In that way, you can be sure that you will have the money you need; social security can be a bonus. It's also important to remember that retirement isn't just cash; as you plan to retire, make sure that you are also building healthy social connections and positive habits to stay strong and flexible. For many however, retirement seems like something so far in the future that it’s often something to be considered “later”. This can be a mistake. Younger adults need to ask: when should I begin my retirement planning?
Answer: The sooner you begin planning for retirement, the easier it will be
You will want to start saving for your retirement as soon as you start getting paychecks. The longer you have money in your retirement account, the longer period of time you have to gain money on those dollars. Fundamentally, retirement dollars should be out making more dollars; the more time you give them, the more they will make.
In addition, starting your retirement savings early reduces your personal income tax burden in your higher-earning years. If you have access to a 401k, max it if possible. If that's not possible, make sure you get enough saved from each paycheck to gain the full benefit of your employer matching your savings.
Wiping out debt before retirement is another method of retirement preparation. Do your best to retire with as little debt as possible. If you want a house, pay it off before you retire. If you want an RV, make sure all the factors, including trailer, tow vehicle and campground membership are covered. Money stress in retirement is incredibly corrosive; don't set yourself up to suffer this unless you have no other options. If you want to stay in one place when you retire, try to buy a home that will work for you as your physical abilities start to fail. For example, having a home with laundry, a bedroom and a bath with a shower all on the main floor can save a lot of stress and expense.
If you don't get the chance to start saving early, it is possible to save retirement dollars later. For example, you might consider adding some freelance work to your full-time job when your children are old enough to care for themselves. A side hustle that makes an extra $500 a month at the age of 50 can give you $60,000 by the time you turn 60.
You can save even more if you live on that $500 a month and increase your available retirement savings. Finally, once you've taken retirement from your full-time job, you can expand the side hustle to earn more since you now have more time. Retirement isn't all about money. If your job has been your main source of social connections, you're going to need to build new ways to socialize and meet new people. Check out free classes in your area, particularly at a local university. Your senior center may be great, but the people you hang out with will influence who you become in retirement. You already have the opinion of a retired person in your head; connecting with younger people can keep your mind fresh and sharp.
Make sure that you have a fitness routine in place before you retire. Sitting still feels good when you're tired, but it can't be your whole life or you will fall into poor health quickly. Find a gym membership in your area and check out a gentle yoga class, low-impact dance class, barre class, cycling group, or walking club. Many non-profit gyms are senior friendly and offer a sliding scale payment option. You can also look for low-cost fitness gear to use to work out at home, particularly when paired with the right YouTube video.
Do your best to go into retirement as healthy as you can be, physically, socially and financially. If your life slams shut socially the day after you retire, you're headed for trouble. Loneliness is physically dangerous. If your bank account is empty 10 days after your retirement reception, your life will be very small. If you go into retirement with a lot of bills to pay each month, the stress will damage your brain and body.
Retirement is as individual as the retiree. However, having resources in retirement is critical. Recommended resources as you plan your own journey are:
- Forbes - Forbes if of course a well-respected American business publication owned by Integrated Whale Media Investments. This article offers guidance on starting early, even if you start small, and building for the long term.
- The Balance - This is part of a group of sites that offers guidance on personal finance, career development, and small business ideas. This article offers guidance on things you can do after 50 to expand your retirement options.
- After 50 Finances - This is a website dedicated to helping those in retirement who don't have access to much or any savings. You can live well on little with the right guidance.