Tips to Retire Wealthy
A lot of us sit back and wish for the day that we can retire a millionaire, and yet so few of us have a strategic plan to do so. In fact, as many as half of all households with Americans 55 and older have no retirement savings at all.
But with the right planning and these tips, the dream of a wealthy retirement is well within your reach:
Start Early
Retirement is no different than with most things that require a lot of planning. The earlier you start, the more prepared you’ll be. If you were to start saving at age 25, for example, as opposed to age 45, the difference is you’ll only need to save about $300 per month at age 25, versus almost $2,000 per month by age 45, if you want to reach $1 million at age 65 (assuming an 8% annual return).
Debt
Debt is not your friend. High interest credit cards and not paying off your balances in full, thereby accruing interest charges, can really take a toll on one’s finances. Think about it. On a card with 17% interest, you’ll be paying almost $1,700 in interest per year on a $10,000 purchase. Paying balances in full also creates a habit of only buying what you can afford to pay for.
Employer Match
If there is a retirement savings plan, such as a 401(k) offered at work, join it as soon as possible. Contribute as much as you can. Contributions are deducted directly from pay, and with an employer matching your contributions, you’d be wise to take advantage of that. It’s free money!
Emergency Savings
Life can be counted on to throw us a curveball once in a while. Start a “rainy day emergency fund” so that you won’t have to tap into your retirement savings or high interest credit cards, should an emergency arise.
Credit Score
No matter how disciplined you are in terms of paying off your purchases in full, the truth is that most of us will not be able to pay for a car or a house with cash which means that taking out a loan is something that we’ll need in those situations. By keeping a good credit score, you can save thousands, sometimes hundreds of thousands, over a lifetime in interest.
Get Good Advice
Consult a professional. When you’re sick, you go to a doctor. When you need legal advice, you look to a lawyer. Financial planning is no different. Seek out the advice of a financial advisor who takes a sensible middle ground approach to investing. And make sure that your goals are clearly understood so that you can review your progress once a year and keep your retirement strategy on track for a wealthy retirement.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC