6 Key Retirement Planning Steps Everyone Should Know
For those who plan properly, retirement is one of the most enjoyable and rewarding parts of their lives. But getting to that stage isn’t easy. The cost of living has increased over time, and it’ll only continue to go up. That’s no reason not to plan!
With a solid retirement plan in place, everyone has the ability to reap the rewards of a long career—no matter what industries they work in.
Let’s go over the key steps everyone should take.
#1 Start as Early as Possible
The sooner you start, the better. No matter how far off you think retirement is, the last thing you want is for it to sneak up on you. Start saving early on to prepare yourself for a proper retirement you can enjoy. A solid 401(K) or IRA is a great place to start. Why?
You want to max out all tax-advantaged investments before trying your hand at other, regular investment options. Some things to consider:
- With a 401(K) or similar fund, your contributions may be matched by your employer
- Contributions to an IRA or 401(K) can be pre-tax, lowering the taxes you owe
- Or, a Roth fund front-loads the tax you pay, maximizing payout later
Whatever kind of you choose, make sure to contribute as much as you can, as often as possible.
#2 Get Risky!
One of the best things about long-term savings plans is that, with enough time in front of you, you have the room and flexibility to take on extra risk. While saving is generally a way to mitigate financial risks later in life, starting early allows you to foreground risk—for great reward.
Individual stocks, or stocks of smaller, up-and-coming companies, are incredible investments for younger investors looking for a competitive edge.
Risk-high investments are sometimes rewarded with greater net profits over a shorter period of time.
#3 …But Know When to Keep It Safe
The conventional wisdom is to target these riskier investments and higher growth early on in your investing career. Then, as you draw closer to retirement, it’s time to scale down the risk.
Most types of retirement accounts will have built-in options that scale your risk profile over time. A target fund with a specific end date in mind will enable you to set and forget (and still reap the benefits of variable risk).
#4 Build (and Cash in On!) Home Equity
One of the absolute safest investments you can make is in real estate. Buying a house, apartment, or any other kind of home does more than put a roof over your head. It’s one of the best ways to accumulate wealth. As they say, it’s the American dream.
Buying real estate is beneficial for a number of reasons:
- It helps you stop paying rent
- It lets you start building equity
- It enables quick income through flipping
- It also provides passive income through rent
In the short term, anyone can benefit from more income. And in the long term, you can count on having a home or even leveraging its value for quick cash. A reverse mortgage in Florida, Texas, or wherever you happen to live can be an incredible boon to your income.
#5 Health is Wealth
One of the biggest expenses later in life will come from healthcare. But you can mitigate and minimize medical expenses with a proactive and healthy lifestyle.
Arguably the most important aspect to staying healthy is maintaining a balanced, nutritious diet. One of the easiest ways to do that is taking advantage of healthy meal delivery programs. Expert dieticians and chefs put together delicious meals that, coupled with regular exercise, provide your ticket to a healthier, longer life. And, of course, fewer expenses down the line.
#6 Retirement as a Business
By the time you retire, you’ll have built a huge repository of skills from your extensive work history. There’s no reason you can’t leverage those skills into a business, or even teaching or consulting younger workers.
Just because you’ve stopped working for the “Man,” there’s no reason to stop working for yourself. And in today’s digital world, it’s never been easier to run a business retired.
If you love to work, being retired is no reason to stop. Instead, you can simply focus on doing what you love.
Start Planning for Your Future Today!
With all these steps in mind, you’re well positioned to start planning for the future you deserve. By starting as soon as possible, and making savvy financial decisions up to and after retirement, you’ll make your 60s and beyond the highlight of your life.
So, what are you waiting for? Start planning now!