While attending school, your main financial concern probably is paying for school or cutting student loans. Not very often students start thinking about retirement savings – a rookie mistake. You can never save for your retirement too soon. Why? The fearful potential running out of money in retirement is scary. Unfortunately, because of health care or nursing home costs, a rapidly dwindling retirement fund is a reality for some people. Here are some helpful tips you can follow as preventative measures!
1. Start Saving up
Cash, even a small amount here and there, adds up! At the beginning of every paycheck, have a certain amount automatically transferred to a savings account. If you saved $100 a month for 50 years, you would have $60,000 (not including any interest offered by your bank) in savings alone! Don’t dip into the account unless it is an absolute emergency.
2. Be Conservative in Spending
The less you spend, the more you can save – plain and simple. Although you don’t have to feel guilty about using excess money for pleasure, try to save a little bit to add to your savings if possible. If you put $20 dollars of your excess spending money in your savings for 50 years, you will have an additional $12,000 on top of your savings!
3. Get a Part-Time Job
Whether you are too busy for full-time work or are already retired, you can take on a part-time job for extra cash to add to the savings. Maybe you can work at your favorite store or earn money off your hobby. If you could make $400 a month part-time, you can save (not including withheld taxes) $4,800 a year!
4. Invest and Monitor Mour Assets
Stocks are a smart way to increase your finances without having to do work. A home is also a valuable asset to have – as long as you keep it market-ready. It is important to monitor your assets at least monthly to ensure they are in good status. You can hire professionals to help you monitor and move forward with any decision making.
5. Postpone Collection Social Security
It may be tempting to start collecting your social security checks when you “come of age”. However, you have the option of holding off which might not be such a bad idea. You can start collecting your social security income when you retire, giving you a chance to prolong the savings you have. Depending on your situation, a part-time job might be enough to hold you over until the time is right.
In the next fifty years, if you follow the proposed plan, holding onto excess money, and contributing a year of part-time work money, you would have approximately $76,000. Now thinking about adding that to a 401k plan, social security checks, and the interest you may get… Start saving for retirement now!