I have an earnest question to ask you…
And please be honest with yourself…
Are you preparing for retirement?
If your answer is “no”…why not?
Millions of working-class Americans have not thought about retirement because they are “living in the moment”, and not too worried about the future.
They are too busy blowing their money on frivolous things, running up credit card debt, going out every night to drink tequilas, paying off student loan debt, etc.
If you are in this camp then you know exactly what I mean…
Many Americans think they have forever to plan for retirement. But when they get older and retirement is nearing, they usually start panicking since they realize they have nothing saved or invested for retirement.
Here are some facts about retirement that will absolutely shock you.
According to the Department of Labor:
- Only half of all Americans have calculated how much they need to save for retirement.
- In 2020, more than a quarter of private industry workers with access to a defined contribution plan (such as a 401k plan) did not participate.
According to Gobankingrates.com
- 1 in 3 Americans has $0 saved for retirement
- 56% of Americans have less than $10,000 saved for retirement.
These are only a few facts about retirement in America that will shock you. I could go on all day sharing more facts but I do not have enough time.
The fact remains that millions of Americans are not preparing for retirement, and you might be one of them.
Not preparing for retirement can have dire consequences.
Some of these consequences can be, not being financially ready for emergencies, you may have to work longer than you intended to, you may outlive your savings, and you may have to live somewhere where you don’t want to in order to stretch your money.
People that delay preparing for retirement end up being miserable and living with regret in their senior years.
It would be best if you weren’t one of those people…
So what I would like to do is give you 8 suggestions you can implement today to start preparing for retirement.
This is not financial or investment advice. These are just my personal suggestions. Please consult a professional financial advisor for advice tailored to your needs and please do your own research.
So without further ado, let’s begin.
1. Start Saving Your Money and Stay Consistent.
The very first thing that you should start doing is saving as much money as possible. Create a separate savings account at your bank and put 10% of your paycheck in there every pay period. If you are able to put more than 10% then do so.
Stay consistent with saving money and don’t touch your savings unless it’s an absolute emergency.
Watching your savings grow is extremely rewarding. And when you reach retirement and look at your huge nest egg you will be very proud of yourself.
2. Start Paying Off Debt.
“Debt is the slavery of the free” – Publilius Syrus
Debt can be a roadblock to a successful and peaceful retirement.
If you have accumulated a lot of debt, you should start formulating a plan to start paying it off.
Start paying off the smallest amount of debt first, then work toward getting rid of larger balances. And try not to get into more debt.
The less debt you have, the smoother and less stressful your retirement will be.
3. Invest in the Stock Market.
Investing in the stock market is an excellent way to build wealth and invest for a comfortable retirement.
Buying company shares allow you to own a piece of the company, and watch your stock portfolio raise in value.
Just understand that the stock market can be volatile. One day your stocks are in the green, the next day they can be in the red and your portfolio loses half of its value.
But if you hold on to your stocks for the long term, your investment returns will be high because history proves that the stock market rises in value over time.
But always remember to buy low and sell high. Don’t do the opposite, because that’s what a lot of emotional investors do when stocks go in the red. Then they end up regretting selling those stocks when the market finally rebounds.
4. Invest in Cryptocurrency
I highly suggest you start adding cryptocurrency to your investment portfolio if you have not done so already.
Crypto is an up & coming way to exchange money without the banks, government, or middle man intervening in your transaction.
Crypto investors have seen astronomical gains throughout the years, and many millionaires have been made all thanks to cryptocurrency.
For example, Bitcoin, the most popular cryptocurrency, has seen the highest amount of gains. If you bought 25 Bitcoins in December 2016 when Bitcoin was around $800 a coin, your total investment would have been around $20,000.
Not too bad, right?
If you held on to your Bitcoins until November 2021 when the price of Bitcoin was around $60,000 a coin and you sold all of your 25 Bitcoins, you would have made $1,500,000! (give or take a few thousand dollars).
That’s an ROI of $1,480,000!
Imagine how you could put that money in your retirement savings, and pay off outstanding debt (minus taxes).
I’m just saying that crypto is a new way to wealth and you should take advantage of getting into crypto while prices are still relatively low.
5. Start an IRA (Individual Retirement Account).
You should consider starting an Individual Retirement Account (IRA) if you are serious about saving for retirement.
An IRA is an account that lets you save money for retirement with tax benefits.
There are 3 different IRAs that are available; Traditional, Roth, and Rollover.
Each has its advantages and disadvantages, so it’s up to you to do your research and choose the best one that suits your needs.
Another benefit of putting your money into an IRA is the compound interest effect, which is interest you earn on top of interest.
The earlier you start contributing to an IRA, the more compound interest you will accumulate, as long as you stay consistent.
An IRA is a must if you want to have a comfortable retirement.
6. Create an Account on the Social Security Website to View Your Future Benefits.
Create an account on www.ssa.gov to view the monetary amount of your future benefits that you will receive when you become eligible.
Once you log on, you will see the amounts you can receive if you take social security early, take the full amount, or delay it.
By looking at your estimated amounts you will be able to plan your retirement accordingly.
7. Start Planning Where You Would Like to Live.
More than likely you will have to downsize your living situation when you retire.
Do you want to live in a cheaper location to save money?
Do you want to move from a large single house to a condo?
Whatever you choose, start thinking about your living situation in retirement. So when that time comes, you are ready to make your move without headache & planning at the last minute.
8. Participate in Your Company’s 401k Plan.
If your company offers a 401k plan, sign up for it and contribute to it. If you can contribute the maximum amount allowed, please do so.
Having another savings nest egg is crucial for retirement.
It’s amazing that many workers do not contribute to their 401k, and when they wake up and realize that they should have contributed, they are not able to grow their 401k to the size they would like to.
If you haven’t started saving for retirement, realize that it’s not too late. But you better get started now. You took the first step by reading this article. The next step is putting into action the suggestions I shared with you.
That’s all for today. Please share your thoughts in the comments section and I will see you next time!