For many young professionals just starting to accelerate their careers, retirement planning is often the last thing on their minds. But anyone who has retired or is near their retirement will tell you that it’s never too early to plan for it. Starting early puts less pressure on you down the road, and ensures your nest egg isn’t depleted soon after retiring. Keep reading for five ways to start saving for retirement now rather than later.
Take Advantage of Compounding Interest
One of the most powerful tools at your disposal is compound interest. Compound interest adds up over time, so the more money you save, the more you earn. Look at it this way; Karol maxed out her 401(k) within the first ten years and didn’t invest another penny. Meanwhile, Bob didn’t contribute anything in the early years and then maxed out his retirement plan after 33 years. Who do you think saved more for retirement? The answer is simple; Karol saved more money because she took advantage of compound interest from day one.
Explore Your Options
For most of us, retirement planning often equates investing in an employer-sponsored 401(k) or some other type of retirement account. However, that’s not the only option. Don’t get me wrong, you can and should take advantage of these retirement vehicles, especially if your employer offers to match a percentage of your contributions. The key to a healthy retirement fund is to be diverse and use your money in a way that aligns with your principles. Don’t be afraid to explore other options and use a combination of wealth-building strategies.
Take Control of Your Financial Future
Everyone has an opinion about planning for retirement. From your parents to friends to mentors, you’ll likely get plenty of advice about finances and retirement plans. While it’s always good to listen to the advice and experience of others, you know your finances and goals better than anyone else. So, don’t take every piece of advice to heart. Instead, work with a qualified professional like a wealth strategist to create a strategy uniquely designed to fit your goals and objectives. Then, take an active role in ensuring you reach those goals.
Make Smart Money Moves
Chances are you already know the importance of saving vs. splurging. You may not need to spend exorbitant amounts of money keeping up with the Joneses, but it’s okay to treat yourself every now and then. That being said, you need to be smart about where your money is going and how it’s being used. Remember to love yourself and your family more than you love Wells Fargo, and make your money work for you by taking control of the banking function in your life.
Analyze Your Goals
Successfully planning for retirement takes careful consideration. You have to dive deep into your current and future financial goals to create a strategy that works for you. It all begins by asking the right questions, like:
- How do I maximize every dollar no matter the current economic situation?
- What am I doing now to maximize my retirement plan if I do retire?
- How can I guarantee I don’t run out of money once I quit my job?
Developing a clear picture of what your retirement years will look like will guide each of your financial decisions going forward. Just remember, your goals may change as time goes on so it’s important to revisit these questions from time to time.
Planning for Retirement Starts with You
It’s never too early to start planning for retirement. With the proper strategy in place, you’ll know how to earn, save, and invest your money in a way that benefits your financial future. If you’re ready to turn your retirement dream into a reality, Sage Wealth Strategy can help!