Did you know that, according to the AARP, there were over 40 million people in the US in 2010 aged 65 years and older? This number is expected to rise to 70 million by the year 2030 and to over 88 million by the year 2050.
Whether you’re close to retirement age or you’re younger and thinking about your future, you need to use the right financial planning tips for when you’re older.
However, doing this correctly can be challenging. It’s difficult to save money while also spending it on things you enjoy, as well as thinking about saving for a house, a car, or your education.
Fortunately, there are basic financial planning tips you can follow to live a fulfilling life while saving up for retirement.
In this article, we’ll review these financial planning tips for retirement. Finally, you can plan for your future and feel financially secure. Read on to learn more.
When it comes to the best financial planning tips for young adults and older adults alike, it’s important to invest. If you’re simply saving your money, then you might be giving yourself some security, but some of your money is going to waste.
You’re missing out on the opportunity to make more money from investing. Many people don’t understand investing, or think it’s something that only experts can do, but they’re mistaken.
By investing, you’re allowing your money to grow. Choose an investment strategy that’s simple and straightforward.
2. When Investing, Start Small and Then Diversify
If you’re already thinking of investing, then you’re already a step ahead of the game. To do this properly, start small with just a few investments you understand well. Then, as your investments grow, you should diversify.
By diversifying, you’re putting your eggs in multiple baskets, so your finances are more secure overall. It’s smart to include a variety of stocks, real estate, bonds, and other types of investment vehicles.
3. Remember to Save
Saving is key to success with retirement financial planning. And the earlier you start, the better. Here’s an example that demonstrates how effective it is to start early. If, when you’re 18, you put $1,000 into a savings account that has an average growth rate of 8%, you get…
$350,000 by the time you’re 60 years old. If you were to do the same thing starting at age 30, this amount of money would only be $130,000 by the time you’re 60 years old.
4. Budget With Your Retirement in Mind
One of the best financial planning tips for planning for retirement is to budget with your retirement in mind. If you spend without thinking much about what you’re spending your money on, it can be challenging to put away money every month toward your retirement.
Instead, sit down and think about how much you’ll have to save every month. Then, plan your budget so that you’re saving this amount (and a little extra for emergencies and unexpected spending).
If you aren’t sure where to get started with your budgeting, you can go to freedominsurancefinancial.com for help with budgeting and other types of financial planning.
5. Tackle Your Debts
The last thing you want when you’ve reached retirement is a mountain of debts. You should be completely debt-free, but if this isn’t possible, you should still get rid of your larger debts before then, such as your mortgage. You’ll also want to tackle big credit card debt.
If you have issues with credit card debt, it’s best to switch to paying with cash so that you don’t accidentally use your credit card too much.
6. Think About Your Retirement Expenses
If you haven’t thought about this yet, it’s time to. Sit down and work out what your retirement expenses are likely to be, such as healthcare, commuting, clothing, food costs, and more. By imagining what your retired life will be like, you can more easily figure out these costs.
Remember to think about what you’ll be paying in terms of a mortgage or rent.
For example, if you have a home now but plan on selling it later to live somewhere smaller in retirement, this would cut down your retirement expenses significantly.
7. Think About Future Medical Expenses
One of the biggest expenses you’re likely to have to worry about when you’re at retirement age is medical expenses. You might have to add supplemental coverage to the health insurance you already have, or get new healthcare altogether depending on your plan.
A way to save money on medical and life insurance when you’re older is by signing up for it a bit earlier. This will make the cost of your premiums lower than if you were to sign up later in life.
8. Don’t Dip Into Your Retirement Fund
If you follow many of the tips in this article, then you’ll be able to have a pretty large retirement fund. It might even be quite sizeable early on. However, remember not to dip into it. Even though it’s tempting to do this, you have to think about your future self.
Need More Financial Planning Tips?
Now that you’ve learned about all the financial planning tips to help you plan for retirement, you might need additional financial planning tips. Maybe you want to learn how to save for college. Or, maybe you want help figuring out how to structure your monthly budget.
Whatever financial planning tips you need, you can find them here on our blog. Simply go to the Finance/Personal Finance section of our website, where you can learn more.