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Perhaps you missed the memo urging you to start saving for retirement in your 20s or 30s. Or, if your situation is anything like mine, you started a family early or didn’t find your passion in life until you were in your 30s.
Fortunately, it’s not too late to start saving for retirement, because you’re likely earning more today than you did a decade ago. You should be able to start saving now and still retire with a hefty nest egg. But first, you must take some essential steps.
Evaluate Your Savings Potential
Be realistic. Sure, we all wish we could save $5,000 per month, but can you actually achieve this based on your earnings and expenses? Remember, no savings amount is so small that it won’t positively impact your goals. Save what you can, even if it’s only a few hundred dollars per month. There are always ways to push your savings goals further by establishing a budget, creating a side business, downsizing your life, or all of the above.
Set a Financial Goal
How much do you need to retire? Start by taking an assessment of where you are financially and where you need to be. How much money do you need to live comfortably in retirement? Do you anticipate a need for $25,000, $50,000 per year, or maybe more? It may be that you have to postpone your retirement by a few years while you make a few adjustments and implement a quick-fix plan to catch up with your goals.
Create a Plan
Any good financial plan should begin with an honest assessment of your goals and the steps you’ll take to get there. Try using a retirement calculator to determine how much you’ll need to save each month in order to retire by your desired date.
You may be surprised by how much money you’ll need to save, but don’t fear the challenge. Consider working longer, finding a second income, or downsizing your lifestyle to enable progress toward your savings goals.
by Qiana Chavaia | WiseBread
