Lots of Americans these days have no savings never mind any retirement funds. Part of the problem is the high cost of living in many areas combined with too many booms and bust economic cycles.
You may find yourself over 50 and feeling the pinch when it comes to retirement. Will you be able to retire comfortably? The answer is, yes, but you have to start making some wise financial moves right away.
If you start taking charge of your finances, you may not only retire on time, but you could even retire rich.
In this article, I will go over several of the things you need to start doing now if you want to be able to retire when you are 65.
1. Start investing rather than just saving for retirement
The fastest way to get to the finish line and retire with enough money to live comfortably is to have your money work for you. This means investing rather than just saving. Now, it may seem like this is impossible since you have trouble saving money as it is.
But, you can start out small by having a small amount of your money taken out of your paycheck and automatically put into an investment fund. Then, when you start building up some capital, put the money into bigger investments, and generate income from these investable assets.
Assets can make you money over time, so think of real estate, index funds, and other things you should be sinking your money into. Savings accounts are not going to cut it because you need every dollar you have to be working for you.
Even real estate is a good investment so putting a deposit down on a rental property or a house that you can flip later is a good way to make up for the lost time. If your area is seeing house values increasing then this is a good sign that it is time to get in on the action.
Also, look into some startups that are looking for investors. It can be quite risky as there is no guarantee that they will be profitable, but if you have some expertise then use it to figure out where the opportunities lie. It can make you a lot of money very quickly if done correctly.
2. Set up a strict budget to free up some money
You don’t have to go extremely frugal here, but you do have to trim some fat. There are surely some things that you are spending money on that is unnecessary and wasteful. For instance, are you eating out for lunch during work every day? If your job has a microwave there, then start bringing in your own lunch and heating it up there.
If you have entertainment expenses every month, start looking into cheaper ways to stay entertained. Pick up a hobby or play a sport instead of going to the movies or just have a beer at home with friends instead of hitting the bars.
An adjustment to your lifestyle is essential to be able to save more money which you can put into investments.
Take shorter vacations and think about doing staycations instead. You can stay at home when you have your time off and do some day trips to where the fun is. If you live near the coast then do some beach days without staying in an expensive hotel.
The best way to get started on a budget is to sit down and figure out where your money is being spent. You can use an app for that to make your life easier and to be able to get an easy to read the report at the end of the month. Then take all of your expenses and divide them up into essentials and non-essentials. It will be easy to take out some of your non-essentials and free up some money.
3. Take on a side gig as an extra income
To give your investment savings a boost, you’ll need to increase your pay. While you could ask your boss for a raise so you can retire on time, this may not work. You should look into a second income.
As a 50 something-year-old, you are probably already stretched thin time-wise. Between your full-time job and family obligations, you may not feel that you have the time for another job. Luckily, you can make money in your spare time thanks to the internet.
You can freelance online and take on gigs when you have time-based on your skills. If you are an accountant for instance, then you could pick up some clients on your own to do taxes or other work.
Starting an online business can also help and make you more than your full-time income if you stay dedicated to it.
Some online businesses are truly hands-off and can be done in your spare time. If you really don’t have much extra time, then you can always outsource much of the work. Marketing your business is one of the most logical aspects to outsource to somebody who only does that one thing.
The best part about some of the side businesses is that they can end up making you more money than your actual job. And if they are easy enough, or you can outsource much of the work, then you can also take this business into your retirement years and have an actual income while you are retired.
4. Max out your 401k contributions
On its own, this finance tip won’t do much to get you to retirement if you don’t already make your 401k contributions. But, when added to everything else on the list, it is another arrow in the quiver that will help you in your retirement.
Most employers will match contributions to a certain amount, so take advantage. However, even if they don’t you should be putting the maximum in every month. If you found yourself with some extra money after making a budget, then this is the best place to park that money.
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