When you think of walking out of the office for the last time—or dialing down your entrepreneurial dealings—how do you envision life to be? Is it filled with travel plans, new business ideas, or moving to that Italian villa? Whatever your plans are, you want to ensure you aren’t just comfortable during retirement, but that you thrive. That requires retirement planning.
The preparation for these dreams starts today. Retirement planning is integral to ensuring you are financially secure as you move to the next phase of your life. What are the secrets to retiring rich, and what tactics should you include in your retirement planning? Keep reading to find out.
Encourage Self-Sufficiency Among Your Children
More and more retirement-aged individuals are helping their children well into adulthood. While there’s nothing wrong with paying their rent a few times or assisting with student loan payments, if you can, you should support them in developing economic self-sufficiency. If you have to dig into your retirement savings, then you can’t afford to help. Instead, assist your adult children by guiding them in developing responsible budgeting and savings habits.
Consider Retiring in a Place with a Lower Cost of Living
Even if you hit the jackpot, the cost of living in the United States is steadily rising. Therefore, retirement savings that only allow you to live in your current city comfortably could go much further in another even country. There are estimates that approximately 8.7 million Americans are living outside of the United States and that 500,000 are receiving social security benefits. Even if you are doing well with saving, consider making another country your home during your retirement years.
Take Advantage of Catch-Up Contributions (if You’re Over 50)
If you are playing catch-up with saving for retirement, the government has made it a bit easier to add more money to your savings. Once you are 50, you can contribute $1,000 more to your traditional or Roth IRA, and $6,000 to a 401 (k). While that might not seem like much, think about maxing out this amount each year, along with your investments. You could be adding tens of thousands of dollars to your final retirement savings amount.
Lower All of Your Expenses
The Millionaire Next Door is a sharp contradiction to how most people think wealthy people live. This bestselling book revealed that the millionaires they interacted with lived in middle-class neighborhoods, drove older vehicles, and significantly reigned in the spending. Do you see how this could mirror your life? Can you move into a smaller home with more affordable utilities? Can you use public transportation or purchase an older model vehicle? See where you can cut spending. The more expenses you get rid of during your retirement planning years, the more money you have to put into retirement.
Start a Side Business
While owning a business may be the last thing you want to do, it can be the difference between retiring with just enough to live or building lasting wealth. Start a business that is reasonably easy to run and can produce consistent passive income. It may take some work to get it started, but once it’s running, you can funnel this money into your retirement savings, and further invest it. Millionaires are known to have multiple streams of income. So, you may want to include entrepreneurship into your retirement planning.
A Rich Retirement Starts With Strategic Retirement Planning
You will spend your life working, saving, and strategizing as you prepare for retirement. You want to ensure that it is worth your while. However, to get what you’ve never had, you sometimes have to do things you have never done. Start thinking big and be strategic about your retirement planning.
Here are some additional resources to support you as you prepare to retire rich.