Retirement may or may not be on the horizon for you. If you’re younger, you may wonder where the best place is to start. And if you’re older, you want to make sure you’re making the right choices leading up to your retirement.
Retirement should be an exciting time in your life. But, to ensure you have enough money to retire when the time comes, you must plan now.
Here are some top tips on how you can prepare for your retirement starting today.
1. Get Long-term Disability Insurance
One way to prepare for retirement in the future is by investing in long-term disability insurance. Getting disability insurance may not have crossed your mind. But it’s essential when you’re working. If you were to get injured, you’d have difficulty reaching your savings goals. Whereas if you have long-term disability insurance, at least you’d have some money coming in.
Worst-case scenario, if you’re unable to work for a year or more, having long-term disability insurance is vital. It would make up for part of the income you’re not making during your recovery. Typically, a long-term disability plan will cover up to 60 percent of your monthly gross income.
You may not be able to reach your savings goals during your recovery. But if you have savings plus disability insurance, you shouldn’t go into debt.
2. Start Thinking of Places to Live
It’s never too early to start dreaming of where you’d like to live after retirement. Do you picture yourself relaxing on the beach? Or, do you desire to move to a different country and live in the countryside?
Envision your future and start planning now! Make a list of areas you’re interested in learning more about. And write things down like how much it would cost to buy a house and live there.
By the way, if you have a significant other, you might want to get their feedback as well. Together, you can develop a plan and have some exciting post-retirement goals lined up!
3. Pay off Debt
If you have any debt, now’s the time to start paying it off. You may have been making a minimum payment each month. If so, see if there’s a way you can contribute more to your payoff plan.
There are always ways you can cut back on other non-essential expenditures. Use the money that you would typically spend on a coffee, for example, to go toward your debt.
Being more aggressive at paying off your debt will make you have more money to save. After paying off your debt, that doesn’t mean you have more to spend. You should make it your goal to use any extra money to contribute to your retirement.
4. Leave Your Retirement Savings Alone
It takes a while to build up a nice nest egg for your retirement. If you end up having more than you thought you would have, great job!
At times, you may get tempted to touch your retirement savings, but leave it alone. The point of having retirement savings is to allow them to grow. That way, when it comes time to retire, you’ll have the money you need.
If you have a financial emergency, it may warrant pulling out some money from savings. But do everything you can not to touch your retirement savings. Otherwise, you may not have enough money to live off of when it’s time to retire.
5. Make the Right Career Choices
Your choices in life heavily dictate your finances. You may not love your current job, but you’re making a steady income. If you decide to pursue another type of job, make sure you’ve planned for that in advance.
You don’t want to quit your job only to find out it’s a lot harder to find work in your new industry. So, put a plan into motion so that your finances won’t suffer. You deserve to follow your dreams, but it’s best if you’re smart about it.
No matter what age you are, it’s not too late to save for retirement. You may feel discouraged if you haven’t made the best financial decisions thus far. But, even if you haven’t made good decisions, you can start planning for retirement today.
So, set up a Roth IRA and invest. There are other things you can do to ensure you have enough money when it comes to retiring. But, remember, don’t touch your savings!
Follow through with your goals — and everything should fall into place!