To enjoy life now is what we all want, to vacation in an exotic place, to tour the country, to dine in good quality restaurants every now and then and to have our own home with all the comforts are goals that we consider to reach in some point of our working life.
Although all that sounds very good, the truth is that there are certain challenges to achieve it -the most difficult thing to avoid is debt payments. But there is an important issue that we must include in our list of financial and personal goals, to save for retirement or retirement.
Unfortunately, many people overlook this delicate issue, but it’s not something you should neglect.
If after several years you have become accustomed to a certain life status, you don’t have to give it up because you haven’t saved enough money. We have prepared a list of practical tips for you to start saving money for retirement.
Start by Reducing Expenses
Before saving money for your retirement you need to have that money, so the first thing on your list should be to analyze your expenses and identify unnecessary cash leaks or, at least, those whose priority is not high.
For example, you can be among the many people who are subscribers to magazines they haven’t read for years, and still pay for them.
Another expense that many have found unnecessary is paid TV subscription, after all, it is likely that you have little time to enjoy the service, an alternative that has worked for many is the IPTV or subscribe to NETFLIX.
Coupons May Help
You may also not be taking advantage of coupons that put local stores or the financial products you use at your fingertips.
For example, various credit cards offer rewards for paying on time such as travel, rebates, prizes, and more, or supermarkets that offer electronic discount coupons that you’re not taking advantage of.
Cut Off Little Food Expenses
Besides, you don’t have to buy coffee, breakfast, and lunch at the restaurant near work every day, or have dinner 5 or 6 times a week. Try taking lunch and coffee from home several days a week and preparing your own dinner more often, you’ll notice how your savings start to rise.
Put A Savings Plan in Motion
There are basically two types of savings plans, the individual ones called IRAs and the ones that are executed by your employer, although in both cases the money comes entirely from your income. About the plans put into practice by your boss, they are as follows:
- 401(k) plans offered to employees of for-profit public or private companies.
- 403(b) plans are offered to employees of tax-exempt or nonprofit organizations, such as public schools, universities, hospitals, libraries, philanthropic organizations, and churches.
- The 457 plans provided for employees of state and local municipal governments (and those of some local schools and state university systems).
- Savings Economy Plans designed for federal civilian employees and non-uniform services.
On the other hand, the best-known individual savings plans are the traditional IRA and the Roth IRA. The main difference between them is that the first is tax-free when you run your weekly savings and declare your income, but it is taxable from the moment you start collecting it.
The Roth IRA is the opposite, you declare it year after year and you can enjoy it with peace of mind. In both cases, there is an annual savings limit, which can be exceeded under certain conditions.
Delays Social Security as Retirement Approaches
When you turn 62 you are already eligible to begin receiving retirement benefits through Social Security, however, you may delay starting to collect this benefit at the most until you turn 70.
By doing this, your monthly benefits may increase by as little as a substantial amount.
It’s understandable that being able to put this method into practice will depend in good measure on whether or not you have the resources, and also the help needed to deprive you of this income for a considerable amount of time. Even if you delay your retirement by as little as a year, you’ll see a noticeable difference.
In addition, you can also increase the potential future survivors’ benefits for your spouse. That way, you make sure you don’t leave your closest loved one empty-handed.
Learn How to Diversify Your Income
Perhaps reducing expenses is not enough, you may notice that you need more money in order to save. In that case, there are different ways to get money.
If you’re starting your career and have the energy you need, you could choose to get a second job, train your skills to start getting paid for them, work peak seasons where employers require it, or simply offer to work overtime.
Some have seen opportunities to earn money through applications such as Uber, making the most of their vehicle, or Airbnb, renting spaces in the home that they are not using for various reasons. This last option may be good for you if you’re close enough to retirement and your adult children haven’t lived with you for some time.
It is reasonable that if you are close to retirement, the less you want to work the more, but the range of possibilities to generate income is quite wide.
Surely throughout your life, you have accumulated things that you no longer use, but that other people might be interested in so it would be useful to learn to use platforms such as Amazon.com, eBay, Craigslist or Etsy.
Both eBay and Amazon are good at selling items that can be easily mailed, such as electronics, books, and clothing. Craigslist is best for items to sell, such as televisions and sofas. While Etsy is the perfect website for you to sell your handmade items.
Lay Out A Strategy
You need to keep in mind that one of your main financial goals should be to have a solid retirement fund. For example, most Americans are or have been subject to long-term loans such as mortgages, and almost everyone after the end of their repayment period expands their consumption level to a “larger” budget. Instead, devote your “monthly fees” now to saving for retirement.
Another great strategy is to take advantage of unexpected income such as a tax break, extra cash from a great sale, or even a lottery ticket in a calculated manner.
That is, many immediately think about replacing their tv, improving their car or going on an exquisite vacation; instead, devote a portion of your income to your retirement fund and enjoy something more moderate.
Automating savings can also be another useful strategy, that way you eliminate the human factor and with that, the desire to give in to doubts to spend the money on something irrelevant. It might also help you to wait between 24 to 48 hours before making a large purchase and during that period ask yourself: Do I really need it?
Don’t Be A Slave to Debt
We recognize that it is much easier to say this than to do it. But the real problem here is excessive debt. It may help to remember that credit card debt, personal loans, and loans for often involve high-interest rates that can end up drowning you in a vicious cycle of debt payments that drive away your retirement fund goals.
If you’re already stuck in this deep hole, try using the tools at your disposals, such as debt consolidation or loan refinancing. In addition, the state is often willing to advise you to help you make good financial decisions. To avoid this uncomfortable situation you can:
- Create a personal spending plan.
- Pay your credit card balances in full each month.
- Try to keep basic expenses (utility bills, groceries, etc.) below 50% of your total household income.
Make discretionary purchases with cash instead of credit or debit, this will have the effect of thinking more than twice before spending the money.
At the End
Enjoying a life of retirement without austerity or total financial independence of children is possible if we prepare the way. But to reach that condition you need to be disciplined now, no matter if you started saving at 25 or 50, the important thing is that you started.
Put into practice the tips we’ve given you, or at least one of them, and you’ll start kneading a respectable sum to live peacefully during your retirement.
In addition, you should keep in mind that there are several options online to keep you aligned towards this objective: A great life after retirement. So, make use of any tool that you may find, especially regarding the possibilities of saving and investing.