When you’re young and starting your career, the secret to wealth involves hard work and knowledge that will translate into a successful career. You can always make investments and continue to grow in your field until you reach the level of wealth you’ve always wanted.
Making a comfortable living during your working years is great, but have you considered what you’ll do after your job ends? Everyone would do well to consider how they’ll fare in retirement.
Unfortunately, retirement isn’t guaranteed for everyone. According to research from GoBankingRates.com, more than 50 percent of Americans have less than $10,000 saved for their retirement, and 33 percent of that number have nothing saved at all. They’re counting on the government and their kids to get them through.
This doesn’t have to be your future. If you’re smart and start planning now, you can not only retire comfortably but also have something to leave your family.
Here are some things everyone should do to make their retirement more comfortable.
Get Life Insurance
Although this insurance policy is meant to be used after your death, it’s a vital part of protecting your wealth. Funeral expenses can cost anywhere from $20,000 to $100,000 on the cheap end. If you don’t have life insurance, your retirement fund (if you have it) will be used to cover the costs, and there will be nothing for your family after you’re gone.
You and your spouse should invest in life insurance as soon as possible, even if you’re only in your 30s. To make the most of your life insurance policy, look at no medical exam life insurance policies. They offer the potential for much higher savings and protect against insurance companies who want to gouge you based on your family medical history.
Start Saving NOW
“If you don’t start saving in a tax-favored retirement account while you’re young, you’ll miss out on perhaps the best investment opportunity of your life,” Beth Koblinger writes in her New York Times bestselling book, “Get a Financial Life: Personal Life for Your Twenties and Thirties.”
Ideally, you should start saving when you’re young, but it’s never too late to start. The longer you save, the more interest you’ll accrue. Ideally, you should begin saving at your first job when you’re in your 20s. This gives you the best chance to bank a million dollars by the time you retire.
If you’re in your 40s and haven’t started saving for retirement, it’s not too late. Each deposit into a 401(k) or similar account will be more since you have to make up for lost time, but age doesn’t necessarily restrict you from a comfortable life after you finish working.
Invest in Financial Education
“What you know influences how much you earn,” says a detailed article on retirement savings from Financial Mentor. “Don’t forget to invest in a financial education.” This investment is a long process, and it’s important to start early. You can’t expect to wake up one day and know everything about investing for wealth, maximizing your 401(k), and living comfortably in retirement without putting in a little effort. You’ll need to spend some time researching and studying. Here are some things you can do:
- Take free classes offered by your financial institutions.
- Attend training on retirement maximization through your work.
- Start investing and learn from successes and mistakes.
- Read financial books, blogs, white papers, and other useful resources.
Focus on growing your financial intelligence on a daily basis. “When it comes to investing, a little knowledge can be a dangerous thing, and a lot of knowledge can be a profitable thing,” says Financial Mentor. “Get a lot of knowledge.”
Stay Out of Your 401(k)
It’s very, very tempting to dip into your 401(k) funds when you’re hit with financial burdens. College debt, medical bills, and other high expenses cause many people to use their 401(k) funds early, but this is a very costly mistake. When your money sits untouched in that retirement fund, it gains interest. The more money that’s in there, the more interest it will accrue. Taking your money out early decreases your interest payments in addition to depriving you of some of your savings.
It’s typically more profitable to take out a loan to cover some of your expenses than it is to take the money from your retirement fund. In the long run, you’ll make a lot more by simply leaving it alone.