Even though most people don’t retire in their forties, most of them are beginning to seriously think about whether they’re saving enough for retirement. Retirement advice in your forties may be similar to what you received in your thirties; however, you probably have fewer years to be planning and saving.
Many people first entering the work force don’t think about retirement, especially if they’re in their late teens or early twenties. They seem to have their whole life ahead of them. Unfortunately time passes all too quickly, and before you know it you’re in your forties and haven’t seriously considered what you’ll do when you’re ready to retire.
If you haven’t begun planning for retirement, there’s no time to waste unless you’re already independently wealthy. You may have 25 years to work and save, but will you be able to save enough?
Start by speaking with a qualified financial adviser. They will be able to show you how much you’re likely to need to live on after retirement. They can also give you advice on how to invest to make the most return on your investment. Of course, with the recent economic downturn the country has had, they will probably suggest investing in something less risky than the stock market until the economy recovers more.
Decide where you would like to see your finances 20-25 years in the future. Do you want to have your own money to live off of or will you be content to live on Social Security, if it is still a viable option? Most people would prefer to live off their own money rather than what the government provides, but many never plan accordingly.
Reduce debt as much as possible. Obviously you’ll need a place to live, something to get around in, and the basic necessities of life. However, do you need a vacation home, three cars, a boat, etc.? If you can sell big ticket items you rarely use but are still paying for, your financial situation will look much better. You can use the money from selling those items to invest in your future.
Save as much as you can. You want to grow your nest egg as much as possible. You can choose to live below your means, use any bonuses or income tax refunds to add to your portfolio, as well as be frugal in your spending. There are many ways to save money; consider things you can do now to give you more money to save.
Consider refinancing your home mortgage if the payments are difficult to maintain. It’s better to refinance while interest rates are down, so be aware of your current interest rate and those currently offered. If you can shave at least two whole interest points off your mortgage, refinancing may be a good choice now rather than later.
Resist withdrawing money from your employer 401K plan. You will have tax penalties for withdrawing funds before you’re 59 1/2 and you’ll have to pay income taxes on whatever you withdraw. Knowing these penalties may help you resist.
Financial experts have determined that most people will need at least 70% of their current income to be able to live comfortably. Following this retirement advice for those in their forties may help you make wise choices so you’re financially ready to retire when the time comes.
Tags: retirement advice, retirement savings, saving for retirement