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How to Plan Financially for Retirement

Regardless of age, making a plan for retirement is an important part of your financial journey. Planning ahead, being intentional on how you spend, and staying focused on what kind of future you really want, will help you through this journey. retired couple relaxing on the beach

Whether you plan to retire five or thirty years from now, it is important to give yourself the best chance for a happy and financially-secure future. 


Top 20 Tips to Prepare Financially for Retirement

1. Ask a professional 

If you are overwhelmed with where to start, meeting with a financial advisor can be a great place to start. Financial advisors can help you set your retirement goals and make a plan on how to get you there.  

2. Stay focused and dedicated 

It's no secret that the sooner you start planning for retirement, the better. However, staying focused and staying dedicated to your retirement goals is important. Picture yourself at your ideal retirement age and think about your future self. What would you like to have the ability to do? What types of achievements do you wish for?

Don’t let your guard down and get stuck in the “I work hard so I deserve _” mindset. You certainly do deserve it and should enjoy your life, remember to keep a balance.

3. Keep your spending under control 

As you continue to work and grow in your career, hopefully, your take-home pay will as well. Instead of changing your lifestyle to match your income, set the extra money aside for retirement.

4. Create a timeline 

After setting your goals, create a retirement savings timeline to accompany those goals with dates and milestones. Mark your estimated retirement date. Constantly updating your timeline will keep you up to date if you are on the right track toward your retirement goals.

5. Work for the future 

Make use of your retirement planning timeline to determine how much you will need in the future to cover your daily needs. Once you get the amount, you will know how much you need to work for your future retirement. Try to increase your income if you see that your current income is not going to be enough. Also, consider how capital gains from your investment plans will contribute and even escalate your goals.

6. Review your progress

Every plan is dynamic. As the seasons change, and to help you remember, check on your established goals and objectives and don’t be afraid to change them if you need to. You should see progress. If not, revisit your plan. Make changes as you see fit. Adjust your plan to ensure progress on your retirement plan.

7. Plan for you and your loved ones

Planning for retirement also includes your family. Do you have children? How old are they right now? How old will they be once you hit the retirement age?  Are you still going to be providing for them once you retire?  Who will be with you once you retire? Those are the questions you want to answer as early as now to incorporate into your retirement plan.

8. Invest in your health

Getting a great payout upon retirement won’t matter if you will only spend it on medical bills. Start investing in your health.  Get in touch with your health provider and always show up for your annual checkup. Eating healthy and exercising will also help to keep you fit until through age.

9. Different saving options

Saving for retirement is not merely depositing money into the bank. There are different savings options you can choose from. Start researching on the web, asking friends and going to your nearest bank or financial institution for advice.

10. Manage your spending

Manage your spending by creating a budget that allows you to still enjoy life during your career. Use coupons on essential items. Keep your credit card expenses to a minimum. Instead of buying that cup of coffee every day, scale it back to a few times a week and save the money towards retirement.

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11. Take care of loans

It's no secret that the higher your debt payments are when you retire, the less you'll have to spend. Essentially, paying off debt now will provide more flexibility during retirement. Consider a plan to try and tackle student loans, credit cards, your mortgage, and any high-interest loans.

12. Avoid fees

Try to save as much as you can for your retirement by avoiding more fees and expenditures. Do not get another credit card if you already have a low-interest credit card with cashback rewards. Try paying off your credit card and switching to a debit card that offers rewards such as discounts at restaurants. Pay on time to avoid credit card fees like late fees.

13. Set aside for retirement

Remember to pay yourself. As you receive your take-home pay set aside an amount for your retirement and make it a habit. As you receive salary increases, set even more aside for retirement; the more you start to make, the more you should set aside for retirement. You’ll get used to this new habit and sooner than later, will start to see the benefits of doing so.

14. Budgeting wisely

Include your retirement plan in your budget and do what you can. If you aren't able to max out your 401(k), are there things you can cut back on in order to do so? Also, consider inflation when creating your budget. Try and save as much as you can and remember, some are better than none!

15. Find the money you already have.

Depending on how close you are to your retirement goal, you may want to consider downsizing your home. Consider purchasing a home that is less than what you can sell your current home and invest the profit of the sale into one of your retirement accounts. Buying a smaller home can also decrease costs such as electricity allowing you to invest the extra money towards retirement.

16. Diversify investments

Don't put your money in just one investment. If one investment is performing poorly right now, you may have another investment that is performing better during this same time frame. Diversifying your investments can help to reduce the risk of loss by not having your eggs all in one basket. Consider adding stocks, mutual funds, an IRA or a 401(k) to your investment portfolio.

17. Protect your earnings

Look into various insurance options such as short and long-term disability and life insurance. If you’re hurt or injured and can’t work, disability insurance may be able to help with lost income or help cover unexpected costs for a certain time frame and hopefully, you can still take steps towards retirement. Being able to protect your financial future is important.

18. Employer-sponsored benefits

Take advantage of your employer’s 401(k) plan if they offer one and try to match what the company is willing to match. If your employer is willing to match 5% and you can also match 5%, that is 10% towards retirement, half of which is your employer's contribution towards your retirement.

19. Individual Retirement Account (IRA)

Have you considered an IRA as another option towards your retirement? Setting aside extra money from each paycheck and depositing it into an IRA savings account, can help you earn interest and potentially gain access to better investment options.

20. Hands off your retirement account

You created your retirement goals and plan for a reason, to retire. While unplanned events and emergencies may occur, try not to supplement those unplanned costs by dipping into your retirement account(s). Try having an emergency fund to cover any urgent needs instead.

Getting ready for retirement takes time. Be patient and prepare to run a marathon and not a sprint when it comes to working towards your retirement goals.



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