It doesn’t matter if you’re 20, 30, or 40 years old; saving for retirement is a wise decision to make. Of course, you may be contributing to Social Security, but it’s nice to have an extra financial cushion, especially if you want to ensure a well-deserved retirement.
Here are 7 tips to help you boost your retirement savings
1. Try to get started today
At the beginning of this journey, you should accustom yourself to save small, comfortable amounts, and it’s essential to do this regularly – once a month or at least once a quarter.
Image source: United Advisers Group
Also, consider diversifying your retirement savings. For example, if you see yourself retired in Greece, then buy more euros, if you want to help your grandchildren in their studies, for instance, in China, buy yuans.
2. Invest in a “retirement” investment portfolio
First of all, non-professional investors need to avoid all speculative types of investment, such as currency transactions in the Forex market and investments in cryptocurrency, since these are very risky options. In addition, pension savings should be risk-free, so you need to diversify your portfolio no matter how trite it sounds.
The best and most conservative solution is the permanent portfolio, the concept of which was formed by investment adviser Harry Browne in 1981.
Its structure is simple: money is distributed in equal shares between four assets – stocks (check the most profitable ones on CNN Business), long-term bonds, gold (you can buy some gold bars and coins at this website), and currency.
Whatever the situation on the markets, at least one of the assets of such a portfolio always grows, even when others are plummeting.
Image source: Rational Invest
3. Open an IRA
Consider opening an Individual Retirement Account. A traditional IRA provides excellent opportunities for retirement savings since earnings are tax-deferred, and your investments may be tax-deductible.
You can also choose a Roth IRA, which is funded with after-tax contributions. When you turn 59½ years old, you’ll get federal-tax-free profit if specific requirements are met. Check what type of IRA suits you best here.
4. Don’t waste extra funds
If you have some extra money, don’t waste it. Every time you get a raise, a cash gift for your birthday, or receive a salary from a part-time job, increase the percentage of investment in your future retirement account. Strive to allocate at least 50% of new money to your retirement strategy.
Yes, you may want to buy new clothes or have a tasty meal at an expensive restaurant, but this is all mundane. So, no, you shouldn’t limit yourself at all, but don’t spend money on a grand scale. Hoarding extra cash is a bigger step towards reaching your retirement goal.
5. Focus on physical health and traveling while young
Medical care doesn’t get cheaper over time. And our body doesn’t get younger, so focus on maintaining your health while you are young and full of energy. Don’t ruin it now so as not to burden your finances with treatment in old age.
Also, have time to see the world while you are mobile.
Finally, don’t put off your entire vacation for retirement, as it will cost you a pretty penny.
6. Pay off your mortgage before retirement
We all understand that in the modern world, it’s reasonable to have a mortgage when you’re young. But don’t burden yourself with the loan in old age, and even more, don’t pass the mortgage-paying to your grandchildren.
By paying off your debt while you’re young, you can get rid of the monthly expenses when you retire and enjoy your paid off home.
7. Check public benefits
The National Council on Aging has a portal that describes various benefits to help cut costs. So, you may be eligible for benefits, including health care and services, housing, employment, and so on.
Summing up this article, we would like to share a bonus tip: don’t forget to invest in yourself. The younger you are, the more chances you have to build a career, gain a new specialty, promote, or start a business.
Accordingly, you will be more likely to receive a high income, and it will be easier for you to save for a decent retirement. In addition, spending on education, professional development, language learning will definitely pay off and contribute to your future.