Financial Planning Tips: Retirement Planning During a Crisis
Money is a necessary evil in the world we live in today; and having enough of it helps to keep us going through some of the hardest times. Today, the “pandemic” has plunged people all over the world into tough situations. Saving and planning for the future is a great way to stay ahead of the curve. Gone are the days of YOLO - living just for today can be great in theory, but quite miopic in practice.
Regardless of how old you are, it’s never too early to start saving for retirement. Having that extra money to fall back on when you retire (or are forced to leave a job) can help smoothen your transition into the next chapter of your life. Retirement funds provide the safety net you need to explore your passions, start something new, or be a vessel for greater things.
It’s easy to get carried away with the idea of doing something productive towards your future, much like new year resolutions. But as with every new resolution, it’s best to start small, go steady, and maintain realistic goals.
Without further ado, here are some ideas for you to maximize your retirement savings:
1.Set up automatic contributions - Your day job most likely offers direct deposits into different kinds of accounts. Talk with your boss and find out what you need to and where you need to sign to set up an automatic transfer of part of your salary into a savings account.
2. Cut down on your expenses - Save today, spend tomorrow. By limiting how much money you spend now, you can start to put more money into your savings account. Remember, you reap what you sow, and although it takes some time, it’s all worth it in the end.
3. Focus on your “rewards” - You probably want to buy a car, own a house, or travel around and spread the gospel! Whatever you want to enjoy in the future, you need to start saving for now. Let those goals be your incentive to cut back on the non-necessities of today.
4. Aim for multiple income sources - More sources of income (maybe a second job, an online blog/vlog, or a side hustle) means more sources of saving. Mo’ money, mo’ savings!
5. Look after your body - Health expenses take a huge toll on your finances. The best way to avoid those expenses is to stay healthy and keep your immunity up. Soak up the sun, get your vitamins, stay hydrated, and exercise often - a healthy body saves you more money than you can imagine!
6. Set reachable goals - Be realistic about how much money you need to save and at what age you are most likely to retire. It’s not fun to think about the future, but it brings perspective and keeps you focused.
Sure, it’s hard to picture what life will look like after retirement. But think of it as minimizing your risk of the unknown - after all, if there’s anything the COVID-19 crisis has taught us, it’s that it’s best to be prepared, hopeful, and looking beyond the here and now. Being financially secure is one such way to glide through both a crisis and retirement.
Contact Landmark Tax to learn more about financial planning, tax preparation and filing, and all things money-related.