Is it Possible for Younger Generations to Retire Wealthy?

For most individuals, the perfect plan is to retire wealthy after having worked for 30+ years and saving money along the way. Unfortunately though, more than half of Americans are so far behind with regards to stashing funds for their golden years that they will not be able to enjoy the lifestyle that they have become accustomed to while employed. If you would like to ensure that you retire comfortably, the advice below will help you achieve this goal.


Automate your Savings

Several of the younger folk state that they don’t have enough money to still save towards retirement after paying bills and student loans. However, research has shown many times over that when savings are deducted first, the same people seem to still be able to meet their financial obligations. Another advantage to having your savings automated is that there will be less temptation to purchase items you don’t really need.


Start Saving and Investing Immediately

The younger you are when you start saving and investing, the more time your nest egg will have to grow. As you get older, it becomes even more crucial to start saving towards your retirement as well. Another excellent piece of advice is to increase the amount of money you save each time you receive a raise or bonus of any sort. If you are able to pay off debt along the way, put the amount you were repaying towards it into one of your investment accounts and watch its growth rate skyrocket.


Be Willing to Take Calculated Risks

In most cases, you will never be able to become wealthy simply by saving alone. This is why it’s important to earn additional funds by means of investing. While compiling a low-risk portfolio may feel safer, it won’t provide you with much of a return over time. If you would like to experience an above average rate of return, you will have to work with a professional financial advisor and include a mix of low, medium and high-risk investments in your portfolio.


Don’t Pause and Resume Savings

Over time, it can be tempting to put a halt on your automated savings, especially when finances become tighter. However, most individuals who do this fail to start saving again at a later stage and this derails their investment plans. The only time you should consider placing a temporary hold on your savings and investment plans is if you are dealing with severe financial constraints such as loss of employment. 


Keep a Close Eye on Fees

All types of investments will involve some sort of fee structure – even many regular savings and checking accounts. These charges can accumulate substantially over time, which is why it’s essential to do as much as possible to reduce them. As a result, you should be aware of the fees you are being charged and what each of them is for. Not knowing what you are being billed for or how much you are paying could cost you thousands of dollars more than they should. 

Whether you’ll retire wealthy or not will depend largely on the actions you take right now. Contact our team today to find out how a tailor-made portfolio can help you achieve your financial goals over time. 

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How Younger Generations can Find Extra Cash to Save towards Retirement

When questioned about why they have not started saving towards their retirement years, many of the younger generation state that there is not enough money left over after paying off student loans and covering living expenses. However, many individuals discover that they are able to find additional cash to save for retirement when they are willing to put in a little extra effort. The advice below can help get you started towards achieving your financial goals for retirement. 


Carefully Inspect Bank Statements

Some of the biggest ways in which individuals lose money each month are repeated small purchases and non-cancelled subscriptions. Start by printing out a bank statement that covers your expenses for the past two to three months because this will allow you to see if there are expenses that can be reduced or even eliminated. For instance, consider making fewer trips to your local coffee shop and ensure that any unused subscriptions or membership fees are cancelled as soon as possible. 

Any money saved by taking these actions can then be put towards your retirement fund.


Consider Taking on a Second Job

If you currently work regular hours and cannot seem to find extra money to put towards retirement, taking on a second job (even temporarily) may be an option. Options such as driving for Uber or Lyft, or even delivering pizzas and other fast food in your spare time can help bring in a fair amount of additional cash. Although it may seem like you aren’t earning a lot from a part-time position, every dollar helps when it comes to investing towards your golden years. 


Avoid Taking on Unnecessary Debt

Although it’s sometimes necessary to take on debt – such as when you purchase a car or home – unnecessary debt can be classified as store credit cards and any other type of expenditure that isn’t absolutely necessary. 

If you do currently carry balances on store cards, credit cards and anywhere else for items such as clothing, gadgets and other non-essential items, consider paying these off as quickly as possible. Once this has been done, you can take the amount you were paying towards these and apply them to your new retirement savings plan instead.


Save those Raises and Bonuses

When receiving a raise or bonus at work, it can be tempting to let these funds simply be absorbed into your regular spending. However, even saving a portion of these instead of spending everything can make the difference between retiring and retiring comfortably. If you still have debt, funds from your raises and bonuses can be applied towards it so that it can be repaid quicker. After your debt has been repaid, you can channel these amounts to your 401(k), IRA or other investment funds you may have.

If you’re unsure of where you can make changes in your existing budget and spending habits, why not contact one of our team members today? They will be most willing to assist you so that you can achieve your goal of being able to retire comfortably.


Take advantage of your employer’s 401(k) and company match.

Here’s the simple breakdown of where your investing should start. First, look into your employer’s 401(k). If you have this and you’re able to, max out the amount of contributions you can put into this fund, which is $18,500 a year of your own money.

That $18,500 doesn’t include your company match. If your employer offers thisthen use it with a grateful heart. A company match of any percentage is a great employee benefit to get you even closer to your retirement goals. Remember though, that match isn’t part of the 15% you’re investing. It’s just a lovely little bonus.

After you hit the $18,500 mark, you’ll call in reinforcements such as the Roth IRA, which allows up to $5,500 a year. If you need help working through all this, or you’re ready to invest beyond those two levels, you should talk to an investing pro.


Rein in your spending.

It’s time to get real. With yourself. Review your money habits to see where you can rein in your spending. That gum-buying routine, drive-thru coffee habit, or comical T-shirt obsession could be costing you some serious money that would be way better used toward investing in retirement.

Be honest with yourself about places you overspend or budget lines that could be easily lowered. Here’s one simple solution as an example: Meal planning can save you around $200 a month. That would give an awesome jolt to your retirement savings right there—without a huge sacrifice other than some time being intentional with your grocery planning and shopping.

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Controlling Expenses after Stopping Work

After retiring, you will most likely be living on a fixed income, meaning that you will have to keep careful track of your expenses each month. Regardless of the level of income you’re going to have during retirement, there is almost always a way to live more frugally. Below are a few tips to help ensure that your investment funds outlive you – and not the other way round. 


Be Aware of Current Expenses

It’s far easier to reduce your spending when you know exactly how much you are outlaying for the various categories in your budget. As a result, you should keep careful records of all the money you currently spend because many individuals tend to be shocked at how much the smaller purchases add up to over time. 

If you are shocked at how much you’re currently spending in a specific category, you will be even more amazed if you sit and calculate how much that monthly expense will amount to over a full year. For example, if you’re spending $200 a month on fast food and eating out, that amounts to a shocking $2,400 per year!


Eliminate as much Debt as Possible

The average person retiring these days carries more than $6,000 in credit card debt and only repaying the minimum required amount on this balance will cost you more than $22,000 over time. 

When you start living on your fixed retirement income, you won’t be able to afford to carry debt repayments and still meet other monthly expense obligations; meaning that you should do everything you can to eliminate all forms of high interest debt before you retire. 


Learn to DIY

Once you’ve retired from full-time work, chances are that you will have more time on your hands than you’ll know what to do with. This means that you can now do many tasks yourself that you may have paid someone else to do previously such as cutting your lawn, painting your house or even general housekeeping. 

Not only will learning how to DIY tasks like these help keep your budget in check; research has indicated that people who keep physically active during retirement will be healthier and live longer than those who don’t. 


Reconsider Phone Plans

While you’re still working full-time, it may be necessary to have a phone plan that provides unlimited data and other features. However, after retiring, you may be able to work with a more affordable alternative. These days, there are many prepaid options that will enable you to keep your existing phone and provide you with far more affordable rates than if you had to renew a contract. 

If you’re able to rein in your spending while still being employed, it will make it a lot easier for you to live on a limited income after retiring. We have dedicated and highly experienced team member available to assist you with planning for this stage of your life, so all you need to do is contact our offices and set up an appointment.

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Why it’s Essential to Remain Active after Retirement

Although several individuals have given some thought to how they would like to spend their time after retirement, a large number still tend to be disappointed because of the loss of identity they feel once they’ve stopped working. However, you need not find yourself in this situation if you’re willing to remain active during your golden years. Below are some benefits you will enjoy by remaining as active as possible once you’ve stopped working.


A Healthy Lifestyle

If you have a body that is healthy, your mind will also follow suit and many studies have shown that walking as little as six miles per week will go a long way to help ward off conditions such as dementia. Gentle exercise also releases endorphins into the body that will help you feel happier, more alert and full of energy. Even taking your dog for a walk around a few blocks each day will benefit your health substantially. 


A Sharp Mind

Not only will you never be too old to learn something new; making the effort to learn new things as often as possible will help ensure that your brain’s cognitive abilities remain intact as you grow older. Now that you have additional time on hand, consider taking a cookery class, learning a new language or even sign up for gardening or art classes. An additional advantage of attending any classes like these is that you’ll get to meet new people along the way as well.


An Opportunity to Help Others

Enjoying some time out of the house and being as active as reasonably possible is your main goal during your retirement years, so what better way could you spend this time than by volunteering at one (or more) of your favorite charities or non-profit organizations? Not only will you be engaging in a productive activity during this time of your life; chances are that you will be able to expand your social circle as well – a win-win for all concerned!


A Chance to Improve your Diet

Many working people state that they just don’t have the time to eat balanced meals more than a few times a week. However, this can change after retirement because you will now have more time to prepare healthy meals. After eating healthier meals for a while, your mind and body will start feeling far better overall and this will allow you to enjoy your retirement years more than those when you were employed. 


The Opportunity to get a Good Night’s Rest

Another benefit that many individuals get to enjoy after retiring is the ability to get a better night’s sleep than when they were employed because they no longer have to wake up to a beeping alarm clock. Getting between seven and nine hours rest each night will go a long way with regards to affecting your overall mood during this time of your life as well.

Even activities as simple as completing Sudoku or crossword puzzles, playing various card games or playing a game of chess with your spouse or grandchildren will help ensure that you remain moderately active once you’re retired from the corporate world. 

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