Saving for retirement is often touted as easy and simply a case of putting your mind to it. For something that is supposedly so easy, a large portion of the population fails to do it year after year. If you're waiting for that magical time period where tucking $15,000 or more per year into your nest egg is going to become gleeful second nature, well you'll be waiting a long time. Saving is hard and there are a lot of hard choices you need to make in order to effectively save for retirement, especially if you are low income.
Here are some of the difficult decisions you may need to make to get your retirement savings on the road:
Saying No To Your Kids
Many people dream of paying for their child's college education, but this is simply not always feasible if you are behind on saving for the day you retire. While it may feel like a selfish decision, the fact of the matter is your children are adults and can benefit from having to take on this responsibility. Your financial security is important, and your kids will definitely appreciate mom and dad not needing to live with them when they can no longer afford their retirement lifestyle due to footing a large college bill decades earlier. If you're uncertain, there are definite pros and cons to this decision. Regardless of your choice, understand that the outcome can be very impactful on your retirement savings if you do not have money put away for this exact situation.
Paying Off Your Debt
The very last thing anyone wants to do is pay off debt. You receive no visible benefit and it can feel like you're just throwing money away. The truth is that paying off your debt is one of the first things you should be doing. The debt can follow you forever and continuously increase along the way. The more time you waste, the more you stand to lose. Tackle any high-interest debt first so you can clear the way for saving and you won't regret it. Be on the lookout for payment plans and deals that can cut your total repayment by 50% or more.
If The Risk Could Ruin You, Don't Take It
Anyone planning to retire that started much later than they should've can get suckered in by the allure of risky investments. You know taking those extreme risks could pay off exponentially for you, and put your well ahead of your financial goal target with money to spare. Unfortunately, that risky venture is just as likely to backfire and not go in your favor. If you think your savings level is low now, you'll be really worried once it is at zero. Taking risks with investments is not a bad choice if it fits your portfolio and it will not completely devastate your goals if it doesn't end in your favor. Make smart choices that lean on the cautious side, and consider meeting with a financial advisor to determine the best course of action. Trying to tackle investing with a DIY approach is a quick way to make sure your money changes hands permanently.
Separate But Equal
Do you regularly dodge talking about finances with your spouse? While you may think you are saving yourself a headache and another fight, you may well be shooting yourself in the foot when the day you retire approaches. Money matters need to be discussed in detail so there are no sudden surprises when the big day arrives. Knowing whether or not your spouse is contributing to his or her own retirement account or if they have a plan for the future may directly impact the decisions you need to make. Even if you decide to tackle your retirement separately, inequality in savings and preparation can result in unexpected expenses that impact you.
Preparing for your eventual retirement is a long road with difficult decisions along the way. Thankfully, you do not need to navigate these choices alone. Contact the BD Financial Concepts team today for more information on securing your financial future.
We are a professional financial services firm located in Sanford, Central Florida.