Let’s admit it—retirement isn’t going to be cheap, especially when you reach those years unprepared. Everyone dreams of having a comfortable retirement, but are you working on making that dream a reality? If you’re looking for ways to boost your savings to cover your living expenses once you retire, we’ve got you covered. Here are some helpful tips to help you get started.
1. Know your retirement needs
First things first, you need to identify what you need to save up for. Retirement is— without a doubt—expensive. Just imagine sustaining your daily needs without receiving monthly paychecks. According to experts, you’ll need about 70% to 90% of your pre-retirement income to maintain your standard of living when you stop working.
This is why understanding your retirement needs is a must. It will help you better understand the non-negotiable aspects of your savings plan, so you can effortlessly cover your future expenses.
2. Set a financial goal and stick to it
Once you’ve identified your retirement needs, the next thing you need to do is create a financial goal. As cliché as it may sound, many people today still find retirement challenging simply because they didn’t prepare for it.
Setting this goal includes identifying practical ways to help you achieve your financial vision or objectives. You can ask yourself questions like, “Do I have a doable budget and am I living by it?” or “What wise financial decisions should I be making now?” These will help you better evaluate how you’re doing financially and what you should do to achieve the goals you’ve set for yourself.
Of course, planning and creating a list isn’t enough—make sure you stay true to it and actually stick to it.
3. Contribute to your retirement and investment plan
Updating your contributions to retirement and investment plans is probably one of the easiest ways for you to get started. This is especially true if you’re working with a company that offers these kinds of benefits. Employer-provided retirement plans allow you to invest portions of your income without cutting out too much from your budget. Make sure to keep your contributions updated, so you can take full advantage of them when you retire.
4. Open an individual retirement account
If you’re looking for another way to start investing and saving up, you can try opening an individual retirement account (IRA). This option allows you to save more and add extra money for your retirement. But before opening one, make sure you understand the benefits of the plan type you’re getting.
5. Automate your savings
Not everyone is a fan of saving up, especially when it comes to retirement. We’re not going to lie—it can really be tempting to withdraw cash from your bank account every payroll date and use it for many different things. To help you save up for yourself first before spending any money, try automating your savings.
This allows you to automatically save up a certain amount on a specific date. Some mobile banking applications now offer this feature, so make sure to enable this option right away if it’s available to you.
6. Stash your extra money
Let’s say you didn’t reach the amount limit of the budget you’ve set. What do you usually do with the extra money? We often get tempted to spend it on unplanned things or activities. While there’s nothing wrong with that, stashing your extra cash will help you save up for your retirement even more quickly.
The reality is we’re not getting any younger, so flee from the temptation to spend on things you don’t need and make saving a habit instead—promise, you’ll thank yourself later.
7. Make smart investments
Investments are another step to reach your financial goals. Nowadays, there are plenty of investment options available. You can get into real estate, investment funds, insurance plans, and more.
Many businessmen, traders, and fintech enthusiasts are also getting into cryptocurrencies like Bitcoin (BTC). Digital assets are gaining popularity recently because of significant gains in their value. The best thing about it is that getting started with cryptocurrencies isn’t as hard as you think.
First, you need to create a Bitcoin account. Peer-to-peer marketplaces like Paxful even give you a free Bitcoin wallet when you sign up! This means you can quickly explore different financial opportunities on the platform using Bitcoin and other cryptos available.
What makes these digital coins even more fascinating for many investors and traders today is their liquidity. Paxful, for example, supports nearly 400 ways to buy and sell BTC with millions of people across the world. This means you can convert cash to Bitcoin or vice versa and use other payment methods that best match your needs.
8. Avoid lifestyle inflation
Your purchasing power increases as your earning capacity increases. This might mean you can now afford to upgrade your gadgets, buy a new car, invest in a real estate property, and more. While earning vast amounts of money is undeniably great, there’s always this risk of falling into lifestyle inflation.
Lifestyle inflation happens when you spend more money only because you earn more money. Many people who aren’t careful with their financial decisions often find themselves trapped in this situation. To combat lifestyle inflation, always be wary of your spending and remind yourself of your long-term financial plans. Doing this will help you be more focused and intentional about your retirement goals.
9. Pay off your debt
Credit card balance and loans are among the things you need to settle if you want to live a debt-free retirement. It’s essential to pay off these financial obligations and, if possible, use credit cards only when needed. Interest charges on credit cards can consume amounts of your money that can be used for something even more important. Sadly, some people only realize how much they’re paying for charges after it all adds up.
Loans and other financial matters need to be settled before reaching your retirement age. Remember, there’s no monthly paycheck to receive anymore, so make sure to list this in your financial plan.
10. Build an emergency fund
Among all the tips on this list, saving an emergency fund is probably the most important. This is what you’ll use for your future hospital bills, medicines and other healthcare expenses, car repairs, and other unforeseen events. If you’re still earning a reasonable amount right now, it’s high time you set aside portions of your income to an emergency fund.
According to most financial experts, the recommended emergency fund amount should be enough to cover about three to six months’ worth of household expenses. This will really require lots of effort to achieve. That’s why it’s essential to carefully analyze your expenses and build a solid financial plan.
There’s no better time than now
Retirement may be expensive, but that doesn’t always mean you couldn’t afford it. All it takes is a sound financial plan and your commitment to sticking with it. Are you all set to work towards the retirement life you dream to live? There’s no better time to start than now! Take the first step today and learn the ropes as you go along your financial journey. Good luck!
*The content of this article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. You should do your own research and may want to seek professional advice before making any decisions.