Having enough money to last through retirement is a growing concern of many Americans today. Because people are living longer, the possibility of running out of money too soon is real. The following steps can help you ensure that you have enough money to last during your golden years.
Control Your Spending Now
It is easy to spend money. Most people enjoy using their money to the max when they are younger and ought to be saving some of it for their later years. Enjoying it now usually means there will not be much left for tomorrow. Remember that your senior years often come with more medical bills and the possibility of needing nursing home care or long term care.
Develop a budget and limit your spending now. Know where your money is going and reduce your bills. Think of all the money you could have had if you were not paying interest on those credit card debts!
Pay Off Your Debt
If you have credit card debt, you are probably paying high-interest rates on them. Start putting extra money toward paying off your debts, then you can enjoy financial freedom. Start by paying off the smallest debt, and then apply that same amount of extra money toward your next bill. At the same time, start building an emergency fund so that when an emergency comes along, you will not need to go further into debt to cover it.
Create Passive Income Streams
Passive income will give you an income with you having to do very little to sustain it, although it may require a considerable investment at first. There are many ways to build passive income. They include:
- Writing a book
- Renting out property
- Selling information products (eBooks, online courses, etc.)
- Start a channel on YouTube
- Create a membership site.
Save Money in Retirement Programs
The sooner that you start putting money into retirement accounts such as a 401(k) or an IRA, the more money you will have at retirement time. As soon as possible, you want to max out your contributions so that the interest will compound. If an employer will make equal contributions, this will enable it to build even faster.
Hold Off Collecting Social Security
If you are able, do not collect social security at least until you reach full retirement age (FRA). Wait longer if possible until you reach 70 because it will give you a much larger income each month. If you start when eligible at age 62, you will get much less money each month than if you waited, and that means you will need to save even more.
Investing can give you a much higher profit faster than any other means. When you are young, you can afford higher-risk investments because you will still have some time to make up for possible losses. As you get older, you want to use lower-risk levels to ensure that your money for retirement will be there when you need it. Diversify your portfolio with some higher-risk investments and some lower risk products that can ensure that at least some of your money will be protected.
Work a Side Job
If you have always wanted to work from home, now is a good time to get a side job working out of your home. Many companies are hiring, and if you have the skills, you could find jobs that will even let you set your own hours as a freelancer. Use the extra money to put into a retirement fund.