What does it look like to live out the rest of your years without financial worries? The key to making that happen isn’t always just about how much money you make. It’s also about making consistently smart and informed decisions. Here are five of those decisions you can make today.
Educate Yourself
So many people claim ignorance when they think about retirement. But ironically, it’s never been easier to access information to teach yourself how you can retire at a specific age and even within your industry.
Blogs are a great place to start (pat yourself on the back for reading this), but there is a treasure trove of personal finance books, podcasts, and YouTube videos for basically any niche. Just make sure you’re listening to someone credible; it’s equally true that this sector of the internet is rife with people trying to influence you to make some less-than-desirable decisions, so use your best judgment and check resources.
Pay Off High-Interest Debt
High-interest credit card debt will eat any potential retirement savings alive if you let it. Manage your credit wisely and only take on new credit when you know you can handle it.
We recommend paying off high-interest debt first to help put more into a retirement fund faster. Still, the “snowball method” of paying off smaller debts and rolling them into your larger ones works just as well. Choose whichever is more financially feasible, and just start paying more than the minimum payment today.
Review Your Existing Plan
Do you have a retirement plan already? When was the last time you went through it to make sure it was still what you needed? You should sit down at least once a year and evaluate your progress.
This helps keep your numbers on track and adjust for life’s many changes. Be as proactive as possible when life gets hairy. Having a new kid or buying a house should automatically spur a desire to triple-check your retirement plan to keep everything organized.
Open a High-Yield Savings Account
If you’re finances are in relatively good health and you don’t need to worry too much about budgeting or debt, it’s time to make your money work for you until you’re ready to retire.
Open a high-yield savings account, commit to putting in a certain amount each month, and don’t touch it until you’re left with only desperate measures or you retire. Starting this today, even with a small amount, is key to accruing wealth passively. Future you will be glad you decided to put $20 a month in the account when you were 30, because that could be as much as $15,000. And that’s assuming you don’t eventually increase your contribution, which you can (and should)!
Define “Comfortable”
What does “comfort” look like to you? Is it jetsetting across the world on a whim? Or is it living a modest life in a quiet town? Both are valid and doable, but they also require vastly different approaches to your retirement plan.
Use retirement calculators to get a ballpark number for how much you’ll need. Don’t just guess—plug in the numbers and get a realistic estimate. This is one of the first things you should do if you’re new to retirement planning. It’ll make it easier for you to make goals and goal posts along the way.
