Saving for retirement is the toughest challenge
when it comes to delayed gratification. Saving money today for retirement, with
the intention of not touching it for decades, is not a habit most of us are
willing to adopt. But we must.
Voluntary saving is the key to a worry-free
retirement. In fact, this item should already appear in your table of monthly
expenses, because according to the National Commission of the Retirement
Savings System, millennial and centennials
must accumulate resources in their Retirement Funds Administrators USA account the equivalent of 11.8 times
your annual salary, to reach a pension equivalent to 60% of your current
salary.
Why
voluntary savings?
But, why voluntary savings? Are employer
contributions and savings deducted from your payroll not enough? Not really,
and here are some of the reasons:
·
Life expectancy for these generations increased.
It is estimated that young people who are currently between 25 and 35 years
old, and who retire at age 65 in good health, will live an average of 20 more
years.
·
Another reason is the changes in the world of
work, where there are more and more independent or fee workers, so employer
savings cease to exist and you depend solely on what you voluntarily enter into
your A fore.
·
Most of the new generations are giving up having
children, which will represent a lack of an economic support network in old
age.
How to work
in the dream retirement?
So get to work, do not think that because you are
in your twenties or thirties it is crazy to save for your old age, in this
retirement it is never too early to start. Here are six tips to get you started
on that dream retirement.
1. Control
your investments
The money you invest in your twenties or thirties
can be put into instruments with higher risk, since in case of loss you have
enough time to recover. On the contrary, when you are five or 10 years away
from retirement, it is better to choose investments with predictable returns
such as fixed term , it will help you keep your savings safe.
2. Plan for
inflation
Inflation and rising prices can eat into the
purchasing power of your retirement funds. When planning your savings, do it in
financial instruments that give you a return , how much? At least the
equivalent of inflation, so you will be guaranteeing that your money will be
worth the same in the future.
3. Talk to
your partner about retirement
Just as couples discuss buying a new car or a
house, it's always a good habit to discuss financial matters in retirement.
The recommendation is that it not be a common fund,
because in the event of a separation it could generate disputes. Save each for
their own retirement plans.
4. Invest in
your physical health
Given the high costs of health care, staying
healthy today is key to staying fit in retirement. Medical expenses could
really throw your finances out of balance.
5. Create a
budget and stick to it
The best way to plan is to know how much you will
need to live on in your old age. Unfortunately, most people don't figure this
out and arrive at retirement without enough savings. Approach your parents or
grandparents and observe their lifestyle, their expenses. Do an exercise of how
you would like to live your retirement and put together a budget. Once again,
considering inflation, calculate how much you should save to live at least 20
years with the style you imagine today.
6. Pay your
mortgage and other debts
Your home is more than a shelter; it is also a
significant expense. By paying off your mortgage, you can finally tap into the
wealth of your home by living there rent-free, eliminating a significant
monthly expense.
Using credit to build wealth is a great strategy,
but you should plan to pay off those large debts before you retire.
You know, making a few small changes in your habits
— maybe working a few more years, saving a little more each month, and living a
healthy lifestyle — can contribute to a much more comfortable retirement plan
by John
Labunski.
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