4 Tips To Financing Your Retirement
Are you thinking that retirement is not in the cards for you due to your financial situation? Stop!! Retirement is attainable even though right now it may seem like an insurmountable task.
If you want to avoid making your retirement a “long-shot” you will need to overcome all the obstacles; to do that you need to take the proper approach. Financially affording retirement doesn’t just happen, it takes some planning and effort put forth on your part.
Your Retirement Income |Plan A or Plan B
Plan A |Hit Or Miss
Your lifetime earnings minus all of the stuff you purchased throughout your lifetime equals what’s “leftover” to fund your years when you stop working.
If you have more money “leftover” than you earned, you get to retire; if not, you have to keep working. That’s not a very good plan; that’s a hit or miss approach to funding the last 30 years of your life.
Plan B |Plan Early, Plan Often
Be more precise and certain. Take the time and make the effort to save and invest for your retirement. Give the planning of your retirement the same commitment you give your career and family.
With a committed effort you will be certain to have enough money to be able to afford retirement; you will not be relying upon “leftover” money.
Change Your Direction
With a few adjustments to your financial ways you can change from a Plan A approach to a Plan B approach.
Tip #1 – Spending Preferences
Get to know your personal spending preferences.
Do you prefer to spend lavishly and save little? Or are you willing to refrain on the spending in order to have more investment money at retirement? You cannot do both, you have to choose. Make the ultimate sacrifice, either get a lot of nice things or have a lot of money when you hit retirement age.
Tip #2 – Does Spending Thrill You?
Set your financial priorities.
If spending thrills you, you may need to regroup and prioritize your financial goals. If you are a big spender, and are okay with that then no problem. However if you are a big spender but still want to retire someday, you may want to reevaluate your spending habits.
If you do not want to follow Plan A, never retire and have to work forever just to keep ahead of your bills, cut back on the spending.
Tip #3 – Watch When You Buy
You can still spend, just watch what you buy and when you buy. Only buy when things are on sale; eventually everything goes on sale.
Only buy what you actually use. Drop your gym membership if you have not worked out in 6 months, slash your cable package, cut back on the cafe lattes, etc, etc, etc.
Tip #4 – Ooohhh, Nasty
Yes budgeting has a nasty reputation; however it does work on helping you keep your spending in line.
To be able to fund your years when you retire someday does not mean that all of your money has to go into your retirement investments and you cannot spend another penny on today’s needs. Affording retirement just means that you need to find a financial balance today between spending and saving. A budget will help you find that balance.
If you want to reach retirement age with enough money to quit working, make the commitment to yourself and your future.