Life goes by quickly. One minute you’re walking into your first day in kindergarten, the next you are getting ready to leave the workforce and enter retirement. If you are one of the 30 percent of Americans who are almost at retirement age with no savings to speak of, it’s time to act. As intimidating as it may seem to start saving when everyone around is shaking their head and saying it’s too late…a start is better than nothing at all. In fact, with a bit of careful planning and a lot of hard work, you may find yourself in a position to retire comfortably in less time than you thought.
1. Tighten your purse strings – hard
Before retirement comes and you find yourself holding up grocery lines so you can count out change, you need to take long look at your spending habits. Start a diary of your expenses, either by writing them down or using online resources. This will help you to better understand where your money goes every month. You may find that a lot of what you buy can be downsized or even reduced entirely.
2. Stop being so generous
Studies have shown that the majority of people of retirement age are still supporting either children or parents. It’s time for tough love. Try to avoid handouts by gently letting your loved ones know that you are preparing to retire and need to start looking out for yourself. Or, if you do continue to support family members, make it clear that you simply can’t continue helping out forever.
3. Think smaller
You can save a great deal of money by moving to a smaller home in a different area. After building equity in your home and enjoying where you’re situated, moving to a tiny space in a less than desirable neighborhood can be a heavy sacrifice. However, the money you can earn through wise real estate decisions can do a great deal to alleviate sentimental pangs.
4. Don’t count on your home
You may have decided that all you need to retire on is the equity in your home. Sadly, this is one of the biggest mistakes people make. The real estate market is highly volatile. What may be worth over half a million one year can be reduced to less than a third the next. Do not consider your home to be your safety net. The best advice is to ignore its worth entirely and focus more on saving wisely and reducing your expenses.
5. Cut up your cards
Carrying debt into a time in your life where you will have little or no income is financial poison. Before you retire, you must do everything you can do rid yourself of your credit card debt. If you are being careful with your spending, you should be able to start to make lump payments that will allow you to happily slice up any cards that might tempt you in the future.
6. Set up a meeting with your boss
If you’ve realized that you simply cannot afford to take all the necessary steps to retirement, and you believe that you deserve it, it may be time to ask for a raise. Plan your meeting with your boss by preparing a list of accomplishments and contributions that you can present, sing your own praises and hopefully your employer will show their appreciation by increasing your income.
7. Get some on the side
Was the door shut in your face when you asked for a raise? It may be time to consider clocking some extra hours to increase your monthly income. If you‘re not interested in working outside the home, there are plenty of online opportunities to supplement your income. Many sites offer freelance positions such as essay writing, data entry or blogging. Although the pay isn’t stellar to begin, with a little effort you can certainly make a decent wage.
8.Stuff your retirement savings accounts
Ideally, people should start contributing to 401K and IRA savings before their mid thirties. The reality is that most people are too busy starting families and deciding on a career at that crucial stage in their lives. As a result, there are many people over 50 who have absolutely no savings in preparation for retirement. If you see yourself in this group, you need to start making these accounts a priority. Start small and remember, money not seen is money not spent.
9. Look at your assets
One of the best ways to build your retirement fund is through investment. Playing the market is an art however, and you always run the risk of losing more than gaining. Conversely, being too prudent can cause just as much damage. Therefore, your portfolio needs to be well diversified. Consider domestic stocks and international bonds, which are fairly secure but give a reliable and often lucrative return. Make sure you avoid the safety of fixed income stocks and focus instead of creating a portfolio of many different stocks from a variety of sources.
Getting the help of a trained financial advisor or stockbroker can make a world of difference when it comes to planning for your retirement. There is no shame in asking for help. Employing a qualified advisor to help you make the most of your money can mean the difference between celebrating your retirement on a cruise ship or opening up a can on ham and sticking a candle on it.
Life is full of important milestones. From an early age, we start to anticipate these major shifts and how our lives will change. . Perhaps the biggest shift is into retirement. It is prudent to prepare yourself, both emotionally and financially for this switch. As dull as it may seem now, you’ll be glad to make the preparations you did.
This post was written by the Frugal Dad. FrugalDad.com is a personal finance site that offers coupons & deals to help consumers save money.