If you’re looking to retire, then planning is key. Unfortunately, you need to build up your finances to enjoy a happy retirement life when you do so. But there is a silver lining in all of this. Thanks to our retirement tips, you too can sit back and enjoy the rest of your days in relative financial safety.
To do that, you do need to plan ahead. Considering that everyone should be doing it, we’re here to give you our retirement tips that allow you to plan strategically.
Determine How Much Time You Have Until Retirement
When building an effective retirement plan, the first phase is all about determining how much time you have left. A retirement plan for a young adult will be much different from an adult with three years left. But what every age group has in common is an investment portfolio.
Every person needs an investment portfolio if they want to retire rich and happy. The more time you have until retirement, the more time you have to grow that portfolio. Let’s assume this to be the case. If you have three decades to prepare for retirement, then you can be flexible. The issue is more prominent when planning late. There isn’t much room to wiggle if you only have three years left. With no plan in place and no finances to work with, your time is very much limited.
So are your investment options. But one thing that goes in your favor is safety from inflation. Naturally, you can focus your investment portfolio on accumulating passive income. When that’s the case, it’s much wiser to invest in bonds and similar less risky securities than copper stocks, for example. With three decades to prepare for retirement, you can shift your investment portfolio to include more volatile options such as stocks. Investing in stocks does give you better returns than bonds, but only in the long term.
So if you have more time to plan, consider the long game instead of the short one.
Determine How Much Money You Need
To retire rich, means accumulating enough wealth to live a happy retirement life. But a retirement tip that many people overlook is that most people fail to determine how much money they need to do so. Things can change a lot in thirty years. The price of milk might rise as much as double, or inflation could decimate your retirement investment and ruin your plans.
Unfortunately, it’s very difficult to keep tabs on these topics unless you’re an active observer. Everyone wants to go through easy retirement, but no one bothers to calculate just how much money they need to retire happy. So the next retirement tip is to do just that.
But how? Well, we can do that by looking at statistics of current annual spending by retirees.
Retirees in 2020 spent $47,259 on average. This number presents nearly $20,000 less than what workers had spent in the same year. So from the get-go, we know that retirees require less money to live. But considering that the cost of living increases every year, you will need to accumulate a greater income until retirement.
Discuss Retirement Spending
Now that you know how much money retirees need to live a happy retirement, the next thing to do is to discuss spending. With inflation being a thing, just assume that everything will get more expensive when the time to retire comes. So when you and your spouse prepare for retirement, prepare that prices will go up as well. This retirement tip will serve those of you who plan to retire in the next few years.
It’s no use discussing retirement spending with your spouse if you have 30 years left in the workforce. Since easy retirement is all about planning, you need to be on the same page with your spouse. That means discussing making huge payments such as a new car or a buying holiday home.
Consider the Gig Economy
According to Statista, the gig economy is fully operational and worth $347 billion. A good retirement tip and a good personal finance tip is to find new sources of income. Your retirement savings might be well on track to support easy retirement, but that doesn’t mean you shouldn’t look for unique opportunities to maximize income.
To do that, consider working past retirement. According to JP Morgan Chase’s research department, 1% of all seniors are earning money through online means. There are plenty of work opportunities for seniors in the gig economy. By working on a short-term basis, seniors can find new sources of income through the gig economy. There are plenty of businesses that require short-term workers, and seniors might find all kinds of employment opportunities.
Seniors can find work for a company, or complete services and get paid for it. Seniors can work past retirement by working as rideshare drivers, delivery drivers, technical writers, or even rent real estate through Booking and Airbnb. While these are only a handful of examples, working past retirement is a good retirement tip that everyone should consider.
Work On A Budget
A budge is a handy tool that can help you plan for an easy retirement. Much like discussing retirement spending, this is one of those retirement tips that benefit those who plan to retire in a few years. A budget will help you for easy retirement as it outlines how much money you have and how much you can spend.
Based on the result of the calculations, you can allocate more money towards your retirement plan. This could mean investing more in bonds or a retirement account. Since the goal of many workers is to retire rich, a budget doesn’t give you that much room to maneuver. But what a budget does do is help you plan for an easy retirement.
Our five retirement tips are here to help you with your retirement plan. Before you even do that, it’s important to have a retirement plan in place that will help you retire rich. As the years go by, your retirement plan will shift and change to meet your needs. What might start as a realistic retirement plan can quickly change due to external factors such as inflation. So that’s why planning is key, but also be aware that having a flexible retirement plan can help you overcome these obstacles.