Categorized | Retirement

5 Steps to a Better Retirement

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Who wants to work until the day they die? No one I would wager. So chances are you are looking at building a retirement fund in order to not work the rest of your life. In recent years the amount of money being put aside in the various retirement funds have been called into question. The last generation’s financial troubles are all too real of a concern with the current generation combating a bad economy, mounting debt, and the goal of putting aside funds for retirement. Follow these 5 steps to a better retirement.

Step One: Bigger Nest Eggretirement

The concept of retirement has changed between the last generation and the current one. More of the current generation plans to do more in their retirement years than generations prior. What this means is the cost of living and expectation of years lived in retirement has risen over other generations. In order to do more in retirement, such as travelling or using the time to discover or enjoy new hobbies and passions will require more money. So the goal to put aside more money should take priority over traditional amounts. Past generation have usually put aside 3/4 of their income in order to survive in retirement. Yet many experts say that 3/4 of one’s income is no longer enough because of cost of living and standard of living. You should aim to put away as much comparably as possible, up to 100% of your income. Meaning that if you currently live on spending X per month, understand that, that cost will most likely not decrease in retirement but may increase over time.

Step Two: Retire Later

The last generation understood their retirement goal, stop working by age 62. But with the current state of the economy and congressional policy that goal of retiring at 62 is no longer applicable. The longer you work the more money you can set aside for your retirement. Aim for retiring from your primary income later than 65. While depending on your lifespan may give you less time off, it’ll secure that the funds you have put aside to last in your retirement period.

Step Three: Set your own path

It is important to set your own path and stay away from the examples set by your parents. The reasoning behind this is that if your parents fell victim to lack of retirement planning or were caught up in the stock market crash, the bursting of the housing bubble, or the cost of living eating away at their savings. Much of the retired generation currently had very little to no personal savings put aside for their retirement years. Many still are completely dependent on Social Security for their month to month financial challenges. So naturally you are going to want to separate yourself from these previous examples, and put away as much money as you can while you are working.

retirement 2Step Four: Invest your money

Even if you are uncomfortable with putting your hard earned money into the stock market, you risk gaining nothing more than the face value of your investment by holding onto it. Whereas even if you invest a small amount monthly, you are likely to see some type of incremental profit on the initial investment which over time can add up substantially. If the traditional stock market is too faced paced or too nerve wrecking for you, perhaps you should look at penny stocks as another forum to invest some of your money in. It is possible to learn how the stock exchange works with very little personal capital invested in the penny stock exchanges. It is also possible that you may come across a potential million dollar stock that needs your low level investment to help propel it and you into financial success.

Step Five: Plan on another career

I know what you are thinking, if I am retired why would I want to plan on another career? But the importance of earning an annual salary can’t hurt your retirement plans. The current policy on collecting Social Security funds state that you can earn up to but not exceeding $14,000 dollars years and still collect your social security benefits. So the best way to plan on your retirement career is to focus on a passion and find a way you can make some money doing it. Maybe you spent your life working a job that paid well but never touched base with your college degree. Maybe teaching part time would be a great way for you to use your passion to make some money in your golden years. The benefits are not just financially based, but also can have tremendous health and positive psychological benefits as well.

Following these five steps to a better retirement can help you reach both financial and personal goals. Investing in your future and your retirement when you are younger, is the best way to accomplish your dreams in your later years!

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