When it comes to planning and preparing for retirement, you are never young enough to start. For some, retirement can seem so far away but those people that are nearing retirement age can attest that time really does fly by. Rather than making time the enemy, why not make it your biggest asset? The sooner you start investing into your retirement the better and bigger financial outcome you’ll have. If you haven’t started thinking about retirement yet, don’t be discouraged! The old saying still rings true, “it’s never too early and never too late.” Here are some tips to get you on the right track to retire a millionaire.
Choose your investments wisely
The obvious way to save for retirement is to do just that, save for it. It’s great to set money aside into a savings account; but if you put your money into an investment account instead, your contributions will start growing and multiplying your money verses just sitting inside the account stagnant. There are lots of investment accounts to choose from but two of the most popular ones are a Roth Ira and a 401k account. Roth Ira accounts offer what’s called compounding interests, which means that you earn interest on top of the interest your principal has already earned. 401k accounts are also great to contribute to, especially if offered through your employer and they have a match. A matching 401k means the amount of money you contribute into the account, your employer puts that same amount into it too. Really there is no bad investment, if you are putting some money aside each month somewhere safe, you are on the right track.
Treat investments like a bill
Once you’ve made your decision on which investment option is best for you, now it’s time to commit. Its best to treat your investment like any other bill you pay monthly, just pay it and think of it as disappeared from your account. Only this type of bill isn’t actually gone, it’s just off to work, making you more money so you can retire off of it. The key to success is leaving the money put, even when unexpected expenses arise, don’t dip into your investments. The longer the money sits in your account, the more mature it gets and bigger the sum grows.
Play with the risk tolerance
Don’t get spooked by the headlines. Living in the digital age, we are constantly being bombarded with information. It is normal for money to fluctuate in interest rates, the stock market, housing market, etc. People claim the sky is falling all the time but if you ride it out you will see financial gain. You can toy with the risk tolerance of your investment accounts by being more aggressive in your youth and gradually getting more conservative as you get older. The key is to leave your money in your account until you are ready to use it.
Retirement can be a daunting topic to think about let alone prepare for. Everyone is in different occupations and phases of life; so what works for one person may not work for you. Make a financial game plan, with retiring a millionaire as your goal, and stick to it. If you stay consistent, you will reach your goals.