If you’re thinking about retirement, a little planning can help you leave the rat race with greater confidence.
Retirement is an exciting time in your life, but it can also be a little intimidating. If you’re worried about what the future holds, being prepared can help you plan a fulfilling retirement — and have money left over.
Check out these tips to help plan for retirement properly.
Always account for inflation
The sad fact of the matter is your money loses value every day. That’s the nature of inflation. As prices slowly go up over time, the purchasing power of your dollar goes down.
The average rate of inflation is usually around one to two percent each year. This may not seem like much, but it adds up over the decades!
After 20 years, your cash takes a significant hit. The only way you can protect it from rising prices is by sheltering your money in high yield savings accounts and specialized investments.
You’ll also want to adjust your prospective post-retirement budget to account for higher prices.
Speak with a professional
When you need someone to fix your carburetor, you bring your car to the mechanic. When you’re worried about a lingering cough, you go to the doctor.
So, it only makes sense to go to a retirement specialist when you need help planning your future. A professional can guide you through this major life event.
While there are general investment and retirement professionals who can help, you should look for specializing experts if you work in a unique profession.
Let’s say you’re a farmer. You’ll have a lot more to do than putting in your retirement papers and showing up to the office’s send-off party.
Your retirement plan involves transitioning your farm to the next generation, which can be a challenging task. A local credit union with a dedicated agri-business team can guide you through a smooth farm succession planning process.
A local credit union specialist can help you balance your personal goals for retirement with what your agri-business needs.
Pay off debts
Your monthly debt payments eat into how much of your savings you get to spend. By paying off debts like your mortgage and auto loans before you retire, you’ll eliminate a significant monthly expense.
Tweak your budget so you can you chip away at your debt while you continue to save for retirement. Just don’t put your savings on hold so you can pay off these debts. If you’re having trouble balancing both, try cutting out bad spending habits to free up more cash.
Looking back on your life, you probably didn’t expect some of the twists and turns it took over the years. The same can be said about your retirement. Although it’s good to have a plan, it hard to predict what you’ll face once you retire.
Unexpected expenses, repairs, and even overspending on fun things can drain your retirement fund faster than you thought possible.
A general rule of thumb is to assume you’ll spend more than just what’s in your budget. With this thought in mind, ramp up your savings to cover surprise expenses in retirement.
Retirement should be the start of a fun, new chapter of your life. You should be excited about the possibilities, not anxious about the financial realities.
Whatever you do to earn a living, make sure you start planning for your retirement now. It will take a lot of work, there’s no doubt. But it will be worth it when you can live out your golden years in comfort!