The average American is quite sensitive to the idea of having enough money for retirement. After all, once you’ve reached old age, you don’t want to have to do the 9 to 5 grind anymore for money. How can you make sure you save up enough to be financially stable in retirement? Here are some of our quick tips to get you started.
How to be Financially Stable in Retirement
Start Saving Now
It’s never too early, or too late, to start saving for your retirement. The sooner you start, the sooner you get interest working in your favor. If you’re in your early twenties or your late fifties, starting today is always the right call. Preferably, you want to start saving for retirement as soon as you start working.
Retirement funds are taxed differently than other types of funds. They’re taxed much more leniently if you take from them only after you retire. As such, they’re a great investment in your financial future. Roth IRAs, traditional IRAs and the like are all great choices. Talk to your financial advisor about which one is right for you.
Pay Down Debts Fast
It’s much preferable to pay down your debts as fast as possible, get them out of the way, and get their interest off your plate. This is the same advise as earlier, just in reverse. The longer you carry your debt, the more in costs you. Make sure you don’t carry it into retirement with you.
Retirees already have a number of expenses to keep up with. The last thing they need is more expenses piled on to their existing bills, especially on a fixed income. Pay off those credit card bills now. Pay down your mortgage as quickly as you can comfortably afford.
Don’t Rely on Social Security
Social Security won’t be enough to cover all of your expenses in retirement. In fact, by some estimates, younger workers might never gain any access to Social Security at all. Make sure you plan for retirement with this in mind. There’s no reason to count on something that might not even be there when you retire!
Instead, make sure your plan includes enough money for you to live comfortably on your savings alone. Consider retiring gradually, working part-time for a few years as a pre-retirement step. This way, you can wait a bit longer before pulling from your retirement savings while still living a bit more relaxed of a life in your older age.