While many consider their pensions and 401k accounts as a sturdy retirement preparedness plan, most do not consider the fact that these financial arrangements could possibly go awry and they could be left without a means to support themselves. It is important, even as young Americans are entering the work force, that they put thought into preparing for an uncertain future so that they may be able to survive even the most unsavory of economic situations.
The truth is, no one can see the future. No one knows what may happen as we age, and when it becomes time for us to retire, we expect the careful financial plans we have created to be in place to allow us to support ourselves during our golden years. But what if they dont?
Numerous things can happen that would ruin even the most meticulous of plans. Economic hardship, mishandled accounts or even a family emergency that forces you to cash in on life insurance, savings or 401k accounts can leave us empty-handed during retirement. It is therefore imperative that, aside from standard retirement plans, you have alternate financial strategies in place to sustain you if all else fails.
Utilizing different methods to prepare yourself for financial stability during your retirement is the best method for self sufficiency.
Minimize Your Costs — Maximize Your Savings
A helpful hint for future retirees, even the youngest of them, is to try not to live beyond your means. Your working years are just that — you are working to support yourself now and working to create a stable future for yourself and your dependents. However, this can be ruined by an extravagant lifestyle of spending everything you make and not considering the future.
This retirement planning strategy, if used over the course of many years, can help you to put aside a great deal of money that can be used to live an easy life after you are no longer working.
Diversify Your Investments — Take Little Risk
While the stock market is a great place to invest, it is constantly changing with the economy. Investing heavily in one area with the expectation of long term gain is unwise. Instead, consider joining forces with a trusted financial advisor who can help you invest small amounts in stocks that are doing well now. Pull out often and set aside your profits into savings to avoid huge losses from larger, unstable investments.
Standard Retirement Preparedness
While this information is being provided as a means to show you how to prepare without it, it is still important that you have standard retirement preparedness plans in place. Be sure to set up 401k accounts, retirement accounts and pensions early on because, in most cases, as long as nothing goes wrong they will often be your most dependable outlet for assuring your financial stability during retirement.
Tax Time — Dont Go Crazy!
Many people look forward to receiving their tax refund because it allows them to catch up on bills and maybe even to splurge on large purchases they may not otherwise be able to make; however, frugal retirement preparedness planners should look at their yearly refund as a chance to pad their retirement accounts.
Financial experts recommend that, if possible, you try to put aside anywhere from a quarter to half of your refund every year towards your retirement. If practiced over many years this will result in the accrual of thousands of dollars on top of what you are able to save from your normal wages.
Debt is a factor that cripples many people and prevents them from being able to provide for themselves not only now but in the future. In order to ensure your financial stability, you should keep outstanding debts to a minimum by attempting to borrow as little as possible.
Avoid having more than three credit cards and attempt to keep two of them for emergency use only. Try to have as few accounts with outstanding balances as possible, as this will prevent you from losing savings if an economic crisis were to occur and lenders began taking recuperative methods to regain lost monies.
A retirement preparedness plan is something that every working American should try to have in place. Having a variety of outlets that can provide needed income if your main retirement plan were to fail is the best way to ensure that you will be stable and financially secure so that you can enjoy your retirement.