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.

7 thoughts on “What You Need to Secure Your Golden Years”

  1. I’m slowly building wealth options on top of my pension (which will hopefully still be intact in 25 years from now!). My biggest hurdle will be the mortgage free living. Since I haven’t yet bought a house, if that goal continues to get pushed further out, I might have to do what I write about: build a tiny cabin somewhere! Not the end of the world. 😉

  2. My retirement savings are pretty low right now, but I am just starting my career so I guess it is semi-understandable. My goal is to work my way up to maxing out my 401k within the next 3-5 years.

  3. Yep, to all of those!

    I’d add one more: Build a side gig that you can turn into full- or part-time enterprise after you retire.

    Being able to fiddle with something you don’t hate and that also makes a little money has a number of benefits. Not least, it keeps you busy and gives you an excuse to meet new people. But it also brings in a little money — in my case, enough to forestall having to pull very much out of savings to live on. The longer you can hold off drawing down savings, the better you’re likely to live in your dotage.

  4. I love saving and put as much as I can into my retirement accounts each year. I would much rather spend less now and have a more comfortable future than say yolo every minute and burn through money left and right now. I expect to have less energy and not be able to work many hours as I get older, so I’m working extra hard now while I can.

  5. Absolutely, nobody wants to have mortgage pressures when older. I totally get that. Best to build up retirement savings as much as possible and as early as possible. Plus, get rid of debt before getting too old!

  6. As soon as I got my first decent job, I started saving for my future especially for my retirement. Now, I am sparing a part of my income for my kid’s future as well.

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