Despite all the doom and gloom about how tens of millions of baby boomers are entering retirement without the resources to support themselves, there are still plenty of individuals who were able to successfully carry out their retirement savings and planning.
Surprisingly, it’s not just the high income earners who make successful retirees. In fact, there are a surprising number of high earners who still find themselves hitting retirement age without having saved enough. And there are also individuals who are able to reach retirement with a healthy nest egg despite never having earned a high income during their working years.
Instead, success in retirement is often related to the following habits and behaviors.
1. They Save. It might seem obvious, but the concept is so central to being a successful retiree that it bears repeating – successful retirees save. They make retirement savings a priority and build regular contributions into their budgets. Being passive and taking the approach of saving “whenever there’s money available” simply won’t work.
2. They Live Below Their Means. Successful retirees often live well below their means. This is true not just during retirement, but also in the years (and even decades) leading up to retirement. In order to be able to save and invest, and to plan for the future, you need to have the resources available to do so.
3. They Have a Budget. Successful retirees generally have budgets, and stick to them, regardless of whether they’re earning a lot or a little. Budgeting is another important foundation for being able to save and invest throughout their lives. Having a budget allows a family to know where their money goes, and to avoid letting expenses get out of hand.
4. Be Smart About Debt. Successful retirees are also smart about the debt they take on. Not all debt is necessarily bad, of course. For example, many families find that at a certain point in their lives it makes sense (both financially and personally) to buy a home. And almost invariably that means taking out a mortgage. If the family makes intelligent decisions about the price and size of the home, as well as the type of mortgage they take out, then this particular types of debt isn’t necessarily a bad thing.
5. Save and Invest Appropriately. Finally, successful retirees generally do a good job at finding the best ways to save and invest their money. And in this context, “best” isn’t so much about finding the best performing stock to invest in – rather, it’s more about choosing the type or class of investment that’s most appropriate for their stage in life, other assets, and lifestyle needs.
It’s worth noting that these principles and habits are valuable not valuable or useful only for retirees. Anyone, at any stage of their life or career, could benefit from following one of more of these habits.
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on Tuesday, July 15th, 2014 at 3:59 pm and is filed under Planning.
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Despite all the doom and gloom about how tens of millions of baby boomers are entering retirement without the resources to support themselves, there are still plenty of individuals who were able to successfully carry out their retirement savings and planning.
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