Saving retirement can be easy, even if you are already in your 50s and approaching the retirement age. All you have to do is choose a few very simple strategies and employ them over the next decade or so and you’ll be on your way to financial stability in retirement.
It may seem like retirement is so far away but it will creep on you faster than you realize. For many people, actually, it is right around the corner. If you are in your 50s and concerned about your retirement account, here are several easy ways you can save for retirement. These will work for you no matter what your age or income level:
1. Account For Compound Interest
Putting a single $1 into a savings account will still net you more in the long run then holding onto the cash. Obviously, it will be worth much more to you than if you were to spend it. However, since savings and investment accounts accrue compounding interest, the longer you leave that $1 in your account, the more it will be worth (and the faster the rate of return).
2. Choose Value or Novelty
Sure, you may finally be making the kind of money you need to buy the things you’ve always wanted, but is that what is in your best interest? Sometimes you have to take a step back and look at the value of what you are buying. Consider, for example, buying a new car with fewer bells and whistles that will have more longevity than one that will more quickly decrease in value. This goes for everything from choosing whether to buy or rent a home, how you take vacations, and what daily lifestyle choices you make.
3. Be A Little Selfish
Many people, particularly grandparents, have a retirement account or a life savings that they want to use to help their progeny attend college, purchase a new home, etc. Before you exhibit your unconditional love for your family by providing them with everything they need, remember that you also need to take care of yourself too. Besides, if they really can’t afford the home or education, this crossroads will help them learn to make more impactful decisions. Similarly, if your good intentions are aimed at helping a person who consistently makes irresponsible decisions, it will likely be a waste of your money. It’s a harsh reality to deal with, but a necessary one.
4. Keep Calm
If you do have a retirement account or some investments designed to mature in time for your retirement, you need to remember that the market fluctuates. Things change with time so your investment might not always appear to be solid. While you should be concerned, this should not make you anxious. Do not simply pull out just because you need money or because the market dips a little. Make smart choices.
5. Be Smart
It is also important to know how retirement accounts work. Many financial planners estimate that you can safely set aside 5 percent of your annual savings for retirement. If you want to have $10,000 in income, you will need to save $200,000 by the time you retire.
6. Be Creative
Speaking of financial planning, it is also a good idea to plan the kind of retirement you want. Many people do not think about this sort of thing until it is too late and have to simply settle for what they have in the account. Would you like to travel? Do you want to own a home near your family? What about a cruise? Consider your lifestyle choices (and corresponding health, living, and daily expenses) and start planning for that!