No matter what your age, it’s never too early or late to improve your retirement planning. Maybe you can’t imagine ever not working in some capacity, or maybe you have a goal of retiring early at a certain age. Unfortunately, many avenues for saving in the US now have embarrassingly low interest rates and the cost of living just keeps climbing. It might be time to re-adjust how you view retirement and change up your savings plan.
For example, Social Security might not even closely resemble what it does today, and working with a Social Security attorney might help you see how this supplement will play out for you. Remember that Social Security is just that, a potential supplement, and should never be used as a sole retirement plan. Here are a few ways to beef it up:
1. Choose the right retirement plan
From a 401(k) to a 403(b), Roth IRA or non-Roth, and everything in between, there’s a plethora of traditional retirement plans to choose from. The best way to figure out the best one for you is to work with a retirement planner. The Wall Street Journal offers tips on how to find one, and remember that the planning part of working with these experts is usually free. They receive commission based on your plan.
2. Embrace a frugal lifestyle
There’s a good chance that even thrifty Americans could spend less and save more. It requires shopping savviness, a penchant for rainy day funds, and re-thinking how you shop and use resources. To get started, prioritize more frugal living, draft a budget and figure out where you’re wasteful. Most importantly, make sure you re-direct those saved dollars towards retirement.
3. Have an accessible savings account
If you pore all your savings into retirement, but suddenly need quick access to that money for things like a medical emergency, you don’t want to get caught in a bind. In an era where high-interest savings accounts are slim to none, your best bet is to do your research and choose an online bank. They usually offer the best rates, and don’t opt for any checks or debit cards. You can auto-send a small savings amount to this account and then forget about it unless you need it for an emergency.
4. Re-think retirement
Fewer and fewer people will be able to completely retire in the future. Consider avenues for a passive income, or feasible work-from-home opportunities to supplement your retirement savings when the day comes. For many, retirement is a chance to delve into a brand new career.
5. Think about the ex-pat lifestyle
Moving abroad has long been an avenue for not just retirement while enjoying lower cost of living, but also taking advantage of the foreign income exemption situation for those who want to continue working (perhaps as a contractor, freelancer, or part-time). Many countries offer fantastic climates, lower cost of living, and legally you won’t pay state or federal income taxes (you will still have to pay into social security and Medicare up until a certain point depending on your age). Costa Rica, some parts of Mexico, and Bali are all popular choices.
What are your best saving for retirement tips?