Many people are likely reading this thinking about planning for retirement, but wondering whether it’s too early to start. The fact is, if you’re in a position to start planning for retirement, it’s never too early to start! Starting earlier will give you a fantastic headstart and ensure you’re more likely to live out your dream retirement. Things like compounding can have a huge effect on how much money you end up with in retirement and whether you can actually live your dream.
Let’s take a look at what you can do to start retirement planning right now.
Make Your Plan
Picture your ideal future. Make sure that this picture of your future aligns with you, your partner/family, and what you really want to achieve. It shouldn’t be a future that belongs to somebody else, or something you just plan because you think you should. It absolutely has to align with you, or you’re not going to put in as much work as you could to achieve your goal. Maybe you want to go to a beautiful place like Porthaven and ensure you are pretty much financially free. Think about where you want to go, who you want to be with, and how you want to spend your time. You can then figure out how much money you’re going to need to live the life of your dreams.
Start Saving Now
The earlier you start saving for your retirement, the better. If you can, get involved with the 401k at work where your employer will match your contributions. This means that less of your income will be taxed, and you can save up way more than you would have been able to alone. Save as much as you can to take advantage of this. The IRA is an option if you can’t use an 401k. Explore various options, and remember that it’s a good idea to have multiple sources of cash so that you can have peace of mind.
Avoid Lifestyle Inflation
As time goes on, it’s all too easy to start spending a little more here and there. You might get a bigger, better car, maybe you get a better phone - all kinds of things can happen. However, your savings should increase with your pay rises, not how much you spend on certain things. Avoid lifestyle inflation at all costs so you can put more money away.
Diversify Your Money
Having as many revenue streams as possible is important, as you won’t have to rely on just one to live the life you want to lead. Make sure you look into investments, and get help with them as soon as possible if you don’t understand them, like many don’t. Having a balanced portfolio is key to success.
Have An Emergency Fund Ready
An emergency fund should cover you for things like unexpected appliance repairs, and perhaps even medical bills. The last thing you want is to go into debt while you’re supposed to be planning your retirement!