One common question that’s being asked today, specifically to the Millennial and Gen Z crowd, is, “Why aren’t you saving for retirement?” Depending on your financial situation and your experience, you might understand why some are, and the same goes for why some aren’t. Not everyone can put back a huge chunk of money for the future. Others have the belief that why bother since they’ll be too old or too sick to do fun and wild adventures during retirement.
Honestly, it’s all going to depend on the person, and their beliefs, retirement, and the future are questionable to some people. But while more and more people within society are questioning retirement, that doesn’t mean that you should, though. So, how can you ensure that you’re going to have a comfortable retirement? The last thing you’re going to want to deal with is penny-pinching, right?
Well, it’s not something you have to do. There is a way to be financially comfortable during your retirement. It’s just all about how you plan it out. So, here’s exactly what you need to know for navigating a comfortable retirement!
Try to start as early as possible
One of the most crucial aspects of a comfortable retirement is starting to plan as early as possible. The power of compounding works best over time, so the earlier you begin saving and investing, the more you’ll potentially accumulate. So, it’s going to be best for you to just go ahead and set clear retirement goals, considering factors such as the lifestyle you desire, anticipated expenses, and any specific retirement dreams you may have. It’s never too late to save for retirement, but usually, the earlier you start, the more comfortable and adventurous it can be.
Planning for expenses upon retirement
What you need to keep in mind is that to plan effectively, you need a clear understanding of your future expenses. So, it’s best to just go ahead and consider factors such as housing, healthcare, transportation, leisure activities, and potential travel. There are other things like indulgences and gifts for people, and if you want a pet, there’s that too. There’s just so much to keep in mind!
It might not be comfortable, but you seriously have to be realistic about your lifestyle expectations and account for inflation when projecting future costs. Yes, over the last couple of years, inflation has gotten bad, so this is something that you’ll sadly need to take account of as well. But in general, understanding your expenses will help you determine the amount of savings required to maintain your desired standard of living.
It never hurts to diversify
Does this sound like a lot of work? To a degree, it does sound like it, but this is something that’s always recommended to do, especially in the name of retirement! You’ll need to keep in mind that investing wisely is a key component of retirement planning. So, why you’ll want to diversify your investment portfolio is all about spreading out the risk and the potential increase of returns. That old saying of “never put your eggs in one basket” really holds true.
You’re going to want to consider a mix of stocks and bonds; checking silver spot price wouldn’t hurt either, and other investment vehicles based on your risk tolerance, time horizon, and financial goals would drastically help (some people are now doing real estate or crypto). But overall, while the idea of this might sound as if it’s stretching you out thin, it’s going to be worth it in the end.
Annual review of retirement plan
It was stated that inflation has gotten out of hand over the last couple of years. This is exactly why you’ll need to go back and review your retirement plan on an annual basis. You need to keep in mind that the future is so unpredictable. There are things such as financial markets, economic conditions, and personal circumstances that can change over time. This is why it’s best to regularly review your retirement plan and adjust it as needed.
Other life events, such as marriage, the birth of a child, or changes in employment, will probably even require some modifications to your retirement strategy to stay on track toward your goals. In general, you just truly don’t know what the future will bring, which is why you’ll need to take a look at your retirement goals one or two times per year and modify them where needed.