As a working American, you’ve likely dreamed of the day when you can finally hang up your hat for good and retire. Some dream of traveling the world, or moving to a tropical area, or simply spending time indulging in hobbies. Unfortunately, that’s not the reality for many retirees.
A recent study from MedicareFAQ found 59% of respondents are concerned about their financial situation in retirement. Meanwhile, 60% say they wish they would have started saving for retirement earlier or contributed more to their retirement savings.
Fortunately, there are steps working Americans can take now to achieve financial security in retirement and avoid living with regret.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Trying to financially plan for life decades into the future is overwhelming. Health care costs, longer life expectancies, inflation and cost-of-living increases are just some of the considerations when you’re figuring out how much money to save. These four tips can help you prevent regret in retirement:
1. Decide how you want to spend your golden years.
To start, make a plan for how you want to spend your retirement. Do you dream of traveling the world, or purchasing your dream home, boat or RV? Developing goals for retirement can help you get an idea of how much money you’ll need to save to achieve those goals. Making a bucket list can also be helpful. You might find you can start crossing items off your list during your working years, thus reducing the financial burden you could face in retirement.
2. Save early and often.
Saving is obviously another key step when planning for retirement, but unfortunately, a lot of people don’t begin saving early enough.
When it comes to saving for retirement, don’t wait. Time and compound interest are on your side. The sooner you begin saving, the more time your money has to grow.
If you haven’t already, check to see if your employer offers a 401(k) and company match. You can also open up an IRA, making contributions to it whenever possible.
If you can, figure out ways to make passive income during your working years. Investing in real estate and a high-yield savings account or CDs are other saving vehicles you have at your disposal.
3. Take care of your health.
It may not be top of mind, but maintaining your health during your working years can help you in retirement. According to the same MedicareFAQ report, 82% of respondents say they didn’t prioritize their health during their working years. Carving out time to exercise, eating a nutritious diet and developing healthy habits can lower your risk of illness later in life.
These illnesses may require you to undergo costly treatments or move into a long-term care facility, which can be expensive.
Being proactive about your health in the now not only increases your chances of a longer life, but it can also help you save on health care costs as you age.
Plus, it will increase your quality of life in the present.
4. Consider taking on a side hustle.
If you want to generate more income for retirement, consider tapping into today’s gig economy. Picking up side jobs, starting a small business or providing services that align with your skills and talents are all great ways to generate income on top of your regular salary.
The extra income can help you cover current expenses, pay off debt or increase your retirement contributions, which will only benefit you in retirement.
During our working years, many of us look forward to life in retirement. The additional free time allows us to slow down and enjoy life, giving us time to reflect and explore ourselves and the world around us. Don’t let financial burdens limit you or fill you with feelings of regret during one of the most precious phases of life. Preparing for retirement now will allow you to fully enjoy it when the time comes.
Pat Simasko is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Simasko Law is a separate entity and not affiliated with CoreCap Advisors. The information provided here is not tax, investment or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Related Content
-
Potential Ripple Effects of Taxing Unrealized Capital GainsThe proposed tax on unrealized gains would be limited to those with a net worth above $100 million, but some see a broad impact on markets and businesses.
-
Succession Musts: Thoughtful Planning and Frank DiscussionsWhen it comes to passing on the family business, you don't want anyone to be surprised about who will control or inherit the business after the owner's death.
-
Five Keys to Retirement Planning and Peace of MindLong, worry-free retirements don't just happen. You have to make them happen. The good news is that it may not be as hard as you think.
-
Here's How to Find Your Way Out of the Inherited IRA MazeTo navigate complex rules on inherited IRAs and RMDs, start by breaking down key terms and common scenarios. A clearer picture of your next steps will emerge.
-
Should You Move Your 401(k) to an IRA Once You Hit 59½?Some 401(k)s allow for in-service withdrawals at age 59½, opening up greater investment options. Here are three reasons for taking the plunge.
-
When It Comes to Insurance, How Much Risk Can You Take?Either you or an insurance company takes on the risk of protecting your belongings from loss or damage. Can you afford to self-insure?
-
Five Ways to Minimize a Higher Capital Gains Tax RateWith Harris’ proposal to raise the capital gains tax rate (which would require congressional approval), investors might want to consider tax-lowering options.
-
Collar Investing Strategy Can Help Protect Your Nest EggHere are some key considerations for using the collar strategy of put options and covered calls to safeguard your wealth in retirement.
