Retirement is something that most people unfortunately don't start thinking about until it is much too late. Then they are forced to work much later in life than they wanted or are forced to rely on the generosity of friends and family just to get by. In this blog we will help you set yourself up for a comfortable retirement.
Don't Count On Social Security
If you have watched any political debate in the last 10 years you will have seen both politcal parties arguing about what to do with Social Security. Each side will contend that if nothing is done then Social Security benefits will run out in the years to come. While this may or may not be true what is definitely true is that Social Security benefits that are paid out haven't kept up with inflation. Where as monthly benefits used to be able to cover a modest lifestyle now cannot even cover a one bedroom apartment in some places. This looks to be even more true in the future. You will definetly need to supplement your Social Security Income.
Start a Savings
One of the first steps to preparing for retirement is to start a savings account and really work to build it up. If you can save say $200.00 a month for 20 years you will have nearly $50,000 in actual liquid cash that go to help supplement the bills that Social Security won't be able to cover.
Buy Term Life Insurance
A term life insurance plan is different than a standard life insurance plan in that while it may be more expensive one you have made a set amount of payments you can actually take money out from it if you are still living during that time. This means as you grow older you have another stream where you can potentially get cash as needed.
Own Don't Rent
Owning your home has many benefits other than just not having a landlord. One major one is that with a home you will almost always gain equity. Equity is the value of the difference between what you owe and what the house is worth. Equity can be gained two ways. One is by making your mortgage payments each month which increases your actual ownership in the house and the other is by the house gaining in value. These things can happen at the same time as well. If you are someone who has been paying on a mortgage for 10 years or more odds are you have plenty of equity in your home. With this you can either sell your house and keep the profits or take out a home equity line of credit if needed.
If you are fortunate enough to work for a company that has a 401k plan take it. If the company has matching funds to a certain amount always invest at least to that amount. By doing that even before the 401k gains value you will be doubling your money every time. If your company doesn't have a 401k or if you just have extra money to invest then looking into mutual funds. Most top mutual funds grow at a much fast rate than inflation and with compounding interest you can expect to see your money grow faster than you can imagine. If you search online there are plenty of investing sites with investment calculators which can give you an idea of just how fast you grow your money before retirement.