Is it Possible to Retire Rich?
An ideal scenario is to retire rich after a lifetime of working and saving. Just how possible is that these days? CNN Money reports that most Americans are seriously behind when it comes to saving for retirement. Just because you have not yet begun saving does not mean you are destined to barely scrape by. Here are some tips that will help you adequately prepare for your golden years.
#1. Begin Saving and Investing right Now
Naturally, the earlier you begin investing the larger your nest egg will be. As time goes on, it becomes even more imperative to start saving toward retirement. Implement an aggressive savings plan, particularly if you are close to retirement age. Be sure to raise your savings amount whenever you incur an increase in salary. Likewise, you may also want to save more if you take on a second job or finally pay off a substantial debt.
#2. Make Savings Automatic
Many people argue that they simply do not have enough money left over after paying their bills. Ironically, when savings are taken out first, those same individuals seem to have no problem making ends meet with fewer dollars. You won’t miss what you don’t have, and will also not be tempted to make major purchases if you know you only have so much money coming in.
#3. Don’t Start and Stop Savings
Perhaps you’ve been saving for a while and find that life changes now make doing so more difficult. It can be tempting to forego automatic savings for the time being. Maybe you think you will only suspend your efforts temporarily, and will get back to saving in only a little while. A good number of other people have thought the same thing, only to find they never quite got around to starting again. Unless you are facing very dire circumstances, stay the course.
#3. Don’t be Afraid to Take (Calculated) Risks
Odds are that you will never save enough money to become rich. Instead, you must earn that money through investments. Creating a low-risk portfolio is comfortable, but will not net you much return. To notice a significant return, you must carefully balance your portfolio to include some low-risk investments, a few high risk ones, and others that are somewhere in between.
#4. Watch What you are Paying in Fees
IRAs, mutual funds, and 401(k) plans all come with fees. Even your everyday checking and savings accounts might also have fees associated with them. These charges can really add up over time, so you should do everything you can to minimize them. This means knowing what fees you are being charged and why. Do not get caught off guard, as doing so could potentially cost you hundreds or even thousands of dollars.
Will you be rich when you retire? A lot of that depends on what you do right now. Make a well calculated plan and stick with it to ensure you are in the great shape financially whenever it is time to retire.