Preparing for Retirement in Your Early 20s

Having a stress-free retirement with more than enough money to retire with should be what we all strive for. When it comes to investing and saving, millennials have some advantage over other age groups, as they have more time to save up. However, a study revealed that millennials have unrealistic retirement plans, where 15% thought winning the lottery was a viable retirement strategy while 11% expect to be gifted retirement money. You need a strategy to plan for retirement in your early 20s.

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This is a proof that people in their 20s are not adequately prepared for their retirement, even though they are the ones known to struggle with retirement savings. In this post, we will highlight tips on how you can get started in saving up for your retirement as early as now.

Start saving today

The first step is to start saving now by opening a savings account. Most employers offer a savings vehicle, like the 401(k) or 403(b), that you can take advantage of and put some money in for your retirement as early as now. Depending on the company match rules, it can yield an immediate 50%+ return on investment. There is also an option to open a traditional IRA or Roth IRA that automatically deducts money from your paycheck to be transferred into your retirement account. Start by saving at least 10% of your gross income and work up from there as your paycheck increases over time.

Freedom from debt

The fastest way you will be able to save enough for your retirement is by getting out of debt. Most millennials are still managing their student loans while incurring other liabilities by getting a high-interest credit card. You will not be able to start saving enough if you are still worrying about paying some of your debts off. It’s time to look at your list of liabilities and find the most effective way to repay them. Be smart in getting loans or credit cards. If there’s no need to get one, avoid it as much as you can.

Invest in long-term opportunities

Millennials must start placing their money on viable long-term opportunities with high returns, such as forex mb-2016-06-graphtrading. There are various reasons why forex trading is alluring for young investors. First, it has a low risk aversion compared with other opportunities. Second, it works perfectly with conservative trading systems where you can cap losses effectively. Lastly, it requires technology to implement strategies, which millennials have high affinity for. The most important variable in investment is creating a diversified portfolio.  Do this by looking at other opportunities where you can place your money.  Target investments include dividend growth, stocks and real estate.

Hire a reliable financial advisor

Do not do it on your own. There are reliable services you can get to benefit from your savings and investments, such as seeking a financial advisor. This professional will help you manage, track, and provide advice to you.  This will help you achieve financial freedom as well as your future goals.  Make sure that they understand your goals.  Another tip is to make sure that they work with other millennials.  Having this experience under their belt will help ensure that they serve your best interests.

Just How Many More Years of Jim Cramer Must We Put Up With?

 

My mother-in-law is very close to retirement.  She actually gave her notice and then very nicely agreed to work a bit longer when they didn’t find anyone to replace her by the time she was set to leave.  But, her clock now is ‘any day’ and I know she’s looking forward to it.

This past Christmas, my father-in-law gave her a present, a little countdown clock that counted down the number of days, hours, minutes, and seconds to her official date.

It reads zero now, and I’m wondering if we might possibly send it to Jim Cramer and have him program it.

Because, seriously, if there’s one person whose retirement I cannot wait for, it is Jim Cramer.

An Expert At Being A Loudmouth

I’m not sure who gave this guy a microphone and who dictated him some financial wizard, but by now anybody that has ever invested money into the market in the last 15 years probably knows who he is.

I seem to remember him first coming out during the 1990’s tech boom and at the time, he was kind of entertaining.

Now, he’s just annoying.

Let me count down the ways in which I dislike Jim Cramer and hopefully will see his retirement announcement soon!

He’s loud and obnoxious

You want to be on TV, you have to stand out.  I get that.  But Cramer is just annoyingly loud.  He never does or says anything calmly!  People are likely nervous enough about their money being in the market, I just can’t see why people want to follow someone that just adds anxiety where no more is needed.

He’s a know-it-all

When you’re good at something, you have a right to boast or act like an expert, but to cross the line to think that your past success means that you know more than every other person on the planet is outright ridiculous, yet that’s what Cramer does.  And, he has been wrong quite a bit, but simply changes his story after the fact to make it seem like his words were twisted.  Stand up guy, I’ll tell you!

mb-2015-08-retireHe instigates herd mentality

Reading message boards on the market, I can’t tell you the number of times someone started their post with “Cramer said…”  It’s scary.  Nobody should have the control over peoples minds that he does.  The average dope (my shortened word for people who are willing disciples of Cramer) may not be an expert in the stock market (and I know I’m not), but Cramer gives way too many people the option to not even try to learn anything about what they’re doing with.

He probably scares small children

Well, I have to believe that this is true, anyway.  He scares me and I’m pretty hard to scare.

He exponentially oversimplifies things

Years ago, I did a lot of the computer work for a small financial adviser firm.  The one owner was OK about talking investments, and one time I brought up a stock, said that I’d heard that it was a can’t miss stock, and what did I think?  He pulled up the news, looked at it, and then pulled up a bunch of charts.  Everything went over my head but that was my first learning of technical analysis and chart reading, two things that real experts do.  He then brought up charts and such on the market and explained how that all fit in.

I stood there for 30 minutes, had most of it go over my head, and only then did he give the recommendation that…..it wasn’t a good stock.  And it turned out he was right.  When I later pointed that out, he said “Well, yeah, even after that I got lucky.  I stay in business because I get more right than wrong, but I do get some wrong.”  Cramer makes it sound like it’s easy and that what he says is a sure thing, and sadly too many people believe that.

As you can tell, I really don’t like him and have no appreciation for him, but I also know that he’s one of the most recognized names in the investing community, so he has to be doing something right.  Whatever that is, I want no part of it.

Want to join me in setting up a Cramer Retirement Countdown Clock?  Who knows, maybe that’ll be the next can’t miss opportunity in the market?  Now, wouldn’t that just be ironic?

Readers, what do you think about Jim Cramer?  Love him?  Hate him?  Rich or poor because of him?  Please leave your thoughts in the comments.

Preparing For Retirement

Before you know it, your retirement will be here. Whether you are nearing it, or it is still a few decades off, it’ll get here sooner than you think. When that time comes, you will want to be as prepared for it as possible. There is a lot that goes into preparing for a retirement, as there are a lot of things that you will need to take care of once you retire. Below is a quick list of the things you should start thinking about as soon as possible, as they will impact you once you retire.

Money

First and foremost you need to think about your finances. While you have a job you have an income, but once you retire, that income is going to be gone. You are going to have to live off of your savings and any other incomes you may have – such as social security. To make sure that you have enough money to live off of, you should start examining what your lifestyle costs, and think about how long you are going to need to live off of savings.

One great way to prepare financially for retirement is through investment. By investing a small amount of money now, it can grow into a larger sum by the time you retire. Investing is not just for the corporate types up on Wall Street, especially these days. With the rise of online brokers you can easily invest at any time, with any amount of money. Many online brokerages allow you to invest in a variety of ways, including the New York Stock Exchance, Forex and International Currency. With a wide range of options, it is up to you how you want to invest, and you can do it from the comfort of your own home. Investing is a great way to secure your financial future, so consider looking into it as soon as you can and then start building up your portfolio.

Where To Live

Where you live now may not be where you want to live when you are retired. Some people choose to move to warmer climates, some to more affordable areas, while others choose to move closer to family. If you plan on moving when you are retired, you should begin researching the new area, and the costs that are associated with it. That way you can make sure it is the right place for you, and that you can afford it when the time comes.

mb-2015-06-chairsActivities 

When you retire, you will have a lot more time on your hands. Think about how you want to spend it. Things like gardening, traveling, and aerobics classes are all common among retirees, but you can choose whatever you like. It is a good idea to think about it now to not only give yourself something to look forward to, but so that you can begin preparing for those activities now. For example  if you want to travel, you can start thinking about locations and making sure you have enough money saved up.

Health 

Lastly, but certain not the least important, is your health. When your retirement comes you want to enjoy it, and you can’t do that if you are not healthy. Take care of yourself now so that when the time arrives, you can enjoy your retirement to its fullest. You’ve worked hard all of these years, and you want your retirement years to be as long and enjoyable as possible.

Planning For Retirement

You can start planning for retirement at any age and take advantage of long-term investment options. Your investment-planning strategy can help you protect your assets and live comfortably during retirement. It begins by evaluating your current financial situation and setting future goals, including the steps to achieve these objectives. While planning for retirement, most people want to establish living arrangements with minimal debts and financial obligations. Because social security income is usually less than what an individual earned while working, it may not provide enough protection and funds to allow for the standard of living that many people desire to have during retirement. Additionally, the shifting economy may not afford every person an opportunity to build their social security income to a desired amount. Therefore, it is beneficial to consider investment choices that will lead to a better quality of living as you age. To gain more information about the investment opportunities that are available to you, speak to an insurance agent near you.
Among the matters that should be taken into consideration for retirement planning are health care and life insurance. Health care costs have risen over the last decade and may continue to increase as you approach retirement age. Some retirees may also be required to pay expensive premiums for health insurance and maintain costly prescriptions. For this reason, incorporating a plan for long-term medical care is a very important aspect with creating a sound retirement plan. Life insurance is a resource for individuals in retirement to borrow against the cash value of policy. If you purchase a life insurance policy early and make contributions to build the equity value, you can tap into these funds during retirement and still maintain the monthly premiums for the policy.
In addition to including the costs of health care and life insurance within your retirement plan, there are other investment strategies that can help you secure your financial future for yourself and your loved ones. Whether you have a 401(k) through an employer or you’re self-employed, a sure way to enjoy your retirement is to set up a 401(k) plan with your financial institution. There are several types of plans that are available through banking institutions. A financial advisor can discuss your options with you and help you get started with preparing for your desired retirement income.
This is a guest post.

Wealth Grows Like A Tree

I live in a neighborhood with a lot of old trees.  We have trees on our property that are at least thirty feet tall, and there are others throughout the neighborhood that are even taller than that.

These trees have been here for a while, well before the neighborhood was built in the 1990’s.

As I looked through the trees the other day, thinking about raking once all the leaves started falling, it occurred to me that people simply don’t plant trees that large.  It just doesn’t happen.  If I want a tree in my backyard, I’m going to get one that’s anywhere from a few feet tall to maybe ten or fifteen feet at the most.

A fully mature tree with roots that stretch far into the ground that’s been around for many a decade?  One of those isn’t making it’s way into my yard, and probably yours, anytime soon.

Your Tree Of Wealth

I started thinking about it and realized that trees are a lot like wealth.  You look around and you see people that have built wealth.  Whether it’s a famous person like Warren Buffet who defines wealth to someone who lives comfortably in retirement because of modest wealth, chances are they did not simply get their wealth planted as it stands today.

Instead, they started off small.  They planted their tree of wealth.

They took care of it.

They watered it, so to speak.

They allowed the roots to grow and spread.

They watched it slowly grow taller.  Maybe so slow that they didn’t even realize it was growing, but when they took a step back and looked at it compared to a few years ago, the difference was noticeable.

One day, they looked at their tree of wealth and realized that it had grown to a significant level and it was all because they gave it care, time, and patience.

Reasonable Expectations

In thinking about how trees grow, the same needs to be said for wealth.  It doesn’t grow quickly overnight.  Patience is key.  For those who are looking to build to a certain level of wealth, expectations must be set.  Time must be allocated.  Care must be given.  Progress has to be measured.

It all fits together.

Readers, if you envision your wealth, does it help if you think of it as growing like a tree? Both up in the sky and through the roots that strengthen it below.  How do you apply the principles of growing a tall tree to growing your wealth?

What You Need to Secure Your Golden Years

How is your retirement looking? Could you add more to the pot?

I’m a firm believer that you can never have too much stashed. For this reason, I also feel it’s important to plan for multiple income sources in retirement. Of course, everyone has their own ideas of what is a good amount of income. But one thing’s for sure: once you are retired, you can’t go back in time and undo mistakes.

Right now, the goal should be securing your golden years. How can you achieve this?

1. Build your liquid savings. Although a regular savings account doesn’t earn much interest, this type of account should be included in retirement planning. Having liquid funds on hand can be a godsend if you deal with emergencies, such as car and home repairs or medical expenses. Most retirees live on a fixed income and without a liquid savings account, meeting certain expenses can be challenging.

Deposit a percentage of your current earnings into your savings account. Do not touch this money–watch it grow. If you are not happy with the rate on your savings account, explore other options, such as a high-yield savings account or a money market account.

2. Employer retirement options. There is no rule that says you have to invest in your employer’s 401(k). But why wouldn’t you? Contributions are automatically taken out of your check and invested, and in most cases, you won’t even miss the money. It is literally one of the easiest ways to grow your retirement. Plus, you can choose how much to contribute.

3. Individual retirement account. Do not get too comfortable with your 401(k).  Yes, this is an excellent way to get started, but add other retirement accounts to the pot.  For example, opening a Roth IRA account can become a source of income during retirement. Since IRA contributions are made with after-tax dollars, withdrawals in retirement are tax-free. It does not take much to get started, and unlike a 401(k), you can choose your investments.

4. Mortgage-free. It is not the kiss of death to retire with a mortgage loan. But if you can pay off your house before retiring, that’s one monster expense you do not have to worry about. Plus, when you own your house free and clear, there is the option of borrowing against your equity if you run into financial hardship (cash out refinance, home equity loan or reverse mortgage). Not that you want to, but it’s always an option.

Take a look at your personal finances. Can you presently afford to increase your home loan payments? This move can knock years off your mortgage term. Additionally, if you are looking to buy a new home, can you afford a 15-year or a 20-year mortgage?

Nobody wants to worry about money after retiring. If you plan early, learn your options and make wise financial decisions, you can sail through your retirement years with very few financial worries.

Information in this post was provided by Amanda G, a frequent contributor to Money Beagle.