Retirement is that time of the life when you can execute what you wanted to do all your life. If planned properly, retirement not only gives you time to think, but also frees you from the shackles that have bound you all your life. Here are some easy yet important tips that will make you financially independent for your retirement –
Start saving for your retirement – The sooner you start saving for your retirement, the better it will put you in a situation to enjoy the retirement. Invest a fixed amount for your retirement and you will see the money growing every year. You can save by contributing a fixed amount to a 401(k) or can go for IRAs as well. Saving in both of these will allow you to have tax savings as well.
Set achievable goals – Every individual is different with different needs. Therefore, it is advisable to plan your retirement which is based on your retirement and not a crafted draft for dummies. Plan your future endeavors and set your goals based over them.
Do not put all your eggs in one basket – To get the best long term returns, invest in different schemes. An optimal combination is investing in bonds and stocks. However, focus more on the stock than the bonds as rising inflation can have adverse effects on the interest payments by bonds.
Watch your investments – Retirements last around 30 years or more so you can not just depend upon the money nest that you have created for you. The best way of growing money is by compounding. Most financial advisors advise that a retired individual should not withdraw more than 4% of the total savings in a year. Apart from your already done investments, it is advisable to invest money after retirement to substantiate your savings.
Working after retirement – A lot of retirees work after their retirement to support them. This is a good idea as working part time after retirement allows you to have some income, which does not put pressure on your savings for the retirement. In addition, working after retirement allows you to be socially active, which has huge psychological benefits.
You may prepare mentally for retirement by looking at the greener pastures. However, in order to graze on those greener pastures, you will have to financially prepare yourself. Follow these simple tips and ensure a smooth and tension free retirement.