Retirement can be a daunting prospect. When you are accustomed to receiving a stable salary, the idea of losing your salary and relying on savings and social security can be overwhelming.
good news? You only need to take a few simple actions to prepare for the retirement job you have always imagined-a fulfilling job without financial stress. This is the way to achieve this goal.
These are the 1
1. Save money since childhood
Giving you the time saved to grow is almost the best thing you can do after retirement. Imagine starting from the age of 22, when you first entered the workforce, you started to earn $300 a month. If you invest this money with an average annual rate of return of 7% (more returns in one minute), by the age of 67, your income will be just over $1 million. However, after five years of waiting, you can start saving, and you will eventually receive $719,000. This is still impressive, but the money to live is much less.
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2. Active preservation
We only used a 7% rate of return in the example? Suppose an IRA or 401(k) has invested heavily in stocks. If you invest safely, you may end up with a much lower return, which limits the growth of your savings. If you plan to buy a lot of bonds in your retirement plan, you may only get an average annual return on investment of 4%. In this case, assuming your monthly contribution is $300 and you have a 45-year savings period, you will end up with only $436,000 instead of more than $1 million.
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3. Get out of debt
Even if you accumulate debt years before the end of your career, accumulating debt can ruin your retirement life. First, the more debt you accumulate, the more money you have to pay interest and the less money you can choose to save. In addition, if you drag your debts into your retirement life, it will be an extra expense that you need to spend every month, which will make your social security benefits and retirement plan withdrawal burden heavy. A better option is to avoid bad debts and limit yourself to be in good shape, such as on-demand mortgages or car loans.
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4. Increase your social security benefits
Although you should do everything you can to save a lot of money to supplement social security benefits, you still want these payments to be as generous as possible. One way to guarantee more money from Social Security is to simply delay your retirement pension beyond the full retirement age, which is when you are entitled to receive a full monthly pension based on your salary history. Postponed to that year, your benefits will increase by 8% for each year you submit until you turn 70. Wait long enough, and you may end up with thousands of dollars in extra benefits each year.
Maybe your dream retirement involves exotic vacations and dinners in high-end restaurants. Maybe this means staying in the home where you raise your children and enjoying local activities and hobbies. Regardless of your vision, these simple actions may become your ticket to achieve the goals you set for yourself.