Does the idea of saving enough money for your dream retirement stress you out? Even if you’re feeling financially sound now, you might worry about whether or not you’ll have the funds to maintain your style of life when it comes time for you to retire. This is a common concern that many people in your situation have. However, with the right preparation and strategy, you can avoid the stress of potentially running out of money during retirement.
Map Out Your “Dream” Retirement
In order to determine where you stand in terms of your retirement, it’s important to first figure out just what constitutes your “dream” retirement. Sure, you may have a good idea of this in your head, but you need to get it on paper so that you can put a monetary figure on the type of lifestyle you desire. Consider making a list of your ideal retirement criteria. For example, where would you like to retire? Costs of living can vary greatly from one place to the next. How do you see yourself living (in a home, in a condo, or even on a boat)? And what kinds of hobbies will you partake in?
Keep in mind that the average person needs between 75% and 80% of their current annual salary to fund their lifestyle once they retire, but if you have higher standard of living, your figure could very well be higher than that.
Work With a Wealth Strategist
Once you have a better idea of what constitutes your “dream” retirement, you can start doing some research into what that kind of lifestyle is going to cost you. Of course, it’s also a good idea to begin consulting with a dedicated wealth strategist, who will be able to handle the research for you and determine how much money you’ll need to save in order to achieve your goal. When figuring out this number, you and your wealth strategist will also need to consider other contributing factors, such as:
- Any remaining debts owed
- Monthly expenses
Be Prepared for Setbacks
Keep in mind that no matter how much you save or how diligent you are about saving for your retirement, there are always going to be setbacks. The last thing you want is to have to pull money from your retirement fund early in order to cover a financial emergency, such as a major home repair or medical bill. This is where it’s helpful to include in your retirement planning a “rainy day fund” or “emergency fund” of sorts, and plan your contributions to each accordingly. This will provide you with added peace of mind in knowing the money you’re contributing to your retirement fund will stay there until you retire.
Consider Investing in Real Estate
These days, real estate is being leveraged as quite an important tool for funding anybody’s “dream” retirement. Specifically, investing in real estate and turning properties into rental incomes is a great way to enjoy additional money after you’ve retired without needing to go out and find another job. Not to mention, you can enjoy a number of tax advantages when you own a rental property. Depending on the location of your rental property and how much money you’re willing to put into it, you can easily bring in $200 to $1,000 more on a rental each month. Of course, you’ll also have to subtract the costs of maintaining the property, along with any other monthly expenses such as included utilities.
Of course, owning a rental property isn’t the only way to generate retirement income from real estate; you can also look into real estate flipping.
Get Out of the Stock Market
This is going to sound unconventional, but one of the best things you can do now to ensure a more financially stable retirement down the road is to get your money out of the stock market. There are so many other viable alternatives to putting your money into the volatile stock market, including:
- Real estate (mentioned above)
- Investing in gold and silver
- Peer-to-peer lending
Are you ready to start building your own wealth outside of Wall Street? If so, then Paradigm Life is here to help; contact us today to find out more about how we can help you achieve your dream retirement.