If retirement prep hasn’t crossed your mind because it feels so far away, then this is the post for you. For many people, planning for retirement feels like a long way away or perhaps, something that just may never be financially feasible. However, with some basic financial planning and a few out of the box ideas, you can set yourself up for a comfortable retirement. Read on to learn about retirement prepping — rest and relaxation await!
1. Start immediately
While this might not sound like a new or creative way to get the ball rolling on your retirement, the stats may surprise you. According to Forbes, 42% of Americans between the ages of 18 and 29 have no retirement savings; 26% of U.S. workers in the 30-44 age bracket also do not have a retirement fund. Additionally, recent data published in Savology’s annual The State of Personal Finance report, reveals that the average realistic retirement age for the majority of Americans is ~73, with only 28% of households being on track to reach their retirement goals, and the average retirement shortfall is more than 10 years.
Opening up a retirement fund is a great place to start your savings efforts. The longer you contribute to that fund, the more compound interest you’ll accrue on the account. Another positive of starting while you’re young and ripe in your career? Fewer expenses. When you have a mortgage, partner, or a family later on in life, you may not be able to contribute as much of your income to your retirement savings. So, even though you may feel a little stretched thin, it can be a good idea to bulk up your contributions as soon as you open up your retirement savings fund, especially if your employer offers a matching program.
401k’s are one of the most popular retirement savings options around because they’re employer-sponsored, which means your employer can help you set up an account and redirect a percentage of your paycheck to your retirement fund. It can be a good strategy to “max out” your contributions, or in other words, select the highest percentage to be deducted from your paycheck. Some employers even offer a matching program wherein they will match a percentage of the dollars that you contribute. This is as close to “free money” as it gets, so it’s almost always worth taking advantage of!
If your employer doesn’t have retirement benefit options, there are plenty of other avenues you can take, including:
- Roth IRA
- SEP IRA
- SIMPLE IRA
2. Consider creative investment options
Whether or not you have a standard retirement savings, there’s always room to start investing in out-of-the-box options and build your retirement from there. Here are a few ideas:
- ETFs: If you’re just starting to invest, ETFs can be a great place to start. They’re basically a collection of different investment shares, usually within the same industry. You can have a broker manage your stocks, control them on your own, or enlist the help of a robo-advisor for a more hands-off approach.
- Real estate: Investing in real estate can be a big step up from robo-advising, but it can really pay off when done right. There are several ways you might invest in real estate, including, short- and long-term rental properties, fixing and flipping houses, or leveraging a reverse mortgage on your own home later on down the road.
- Collectibles: If you have a passion for sports, fine jewelry, antiques, or some other collectible items, it may be a good idea to build up your collection. If your items are in good condition and prove valuable at a later time, you can potentially put substantial sales money toward your retirement savings.
3. Find unique ways to make extra cash
Besides investing in retirement funds, real estate, and stocks, there are plenty of fun ways you can bolster your savings. That’s right, fun. Check out these unique ideas you can use to boost your retirement and other savings funds.
- Sell your clothes online
- Walk dogs in your neighborhood
- Work at a fun place part-time, like an art studio, music venue, or flower shop
- Earn passive income through dividend stocks, high-interest savings accounts, P2P lending,
- Build a website to drive advertising revenue or do affiliate marketing
4. Seek opportunities to save
Another great way to start building your retirement is to focus on saving money and reinvest the dollars that you save back into your future. Here are a few unique ways to start saving and increase your savings rate today:
- Use coupons and automatic promo codes with apps like Honey.
- Buy used clothing, furniture, and more through OfferUp, Craigslist, PoshMark, etc.
- If you’re trying to save on taxes, you may contact a professional tax preparer that likely uses software like ProSeries.
- Assess your insurance coverage annually and negotiate with your provider when possible.
In addition to these ways, consider various money challenges that you can do either on your own, or with a friend who happens to be an accountability partner. Money challenges are great ways to eliminate spending, ditch the habits, and pad your savings to continue making contributions toward retirement.
5. Look at unique travel options
Retirement doesn’t just signify the end of a long, fulfilling career, it’s also a time to explore and try new things. For many retirees, travel is just the unique experience they’re looking for. However, traveling on a retirement income isn’t always a breeze. Here are some unique ways to help you save while you explore the world:
- List your home on a short-term rental site, like Airbnb or VRBO while you’re away.
- Look for cheap accommodations using websites like Travel Pirate and Scott’s Cheap Flights.
- Earn extra money or accommodations by working while you travel — language teaching jobs, travel guides, and house sitting are great options!
- Use public transportation to save on gas, rental car costs, and car insurance.
- Travel in an RV, van, or pack camping gear to save on lodging.
- Cook your own meals when possible — discovering local ingredients can be a real treat, too!
Whether you’re five, fifteen, or fifty years away from retirement, there’s always time to sort out your savings. From setting up a 401k with your employer to finding secondary jobs to fill in the cracks, there are plenty of ways you can foster a financially-stable and enjoyable life in retirement. Use these five tips to help you navigate retirement planning in a fun and creative way. If you’re still feeling stuck and unsure where to start, consider using Savology’s free retirement calculator to get a better idea of what your retirement looks like now, and how you can work towards improving your outlook. Happy saving!
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