Saving up for retirement is one of the things that everyone should pay attention to and take into consideration. Sooner or later, you’ll realise it’s time to stop working and retire. It would be nice to retire if you have sufficient money and don’t have any debts to pay and worry about. Retirement is a stage in life where you can relax, travel and enjoy life. But it is impossible to do any of these if you are in debt. Before you reach this point in life, you should have at least paid all your debts so you can enjoy your retirement.
Planning Your Retirement
Are you in your 40’s or closer to your retirement age? What are your financial goals? Do you want to set up a retirement fund but are having difficulty because you simply cannot get out of debt? Do you want to invest in the future? It is best to determine your goals in life.
It is ideal to put up an emergency fund; it may not be like what financial experts suggest but saving up even smaller amounts is better than nothing. Why emergency fund? You don’t know what’s going to happen in the future or in the next few days. Without it, you are going to rely again to your credit cards or private financing. But if you have an emergency fund, you are preventing yourself from borrowing money with high interest rates.
Before you reach your retirement age, it would be ideal to have paid off your debts. Again, you can practice the stack method. This method requires you to list down all your debts. Loans with highest interest rates should come first, down to the lowest. Prioritise the first one, you should immediately settle loans with high interest rates. Cross it out when you are done, then proceed to the next until you reached the bottom of your list. Easier said than done.
How can you make this possible? Avoid making new loans or using your credit cards; pay in cash and make use of what you have in hand. Once you are done with the list, you can save up for retirement. If you aim for a more secured future, it’s time to start saving up and avoid unnecessary expenses.
Cutting down your credit card usage and extra expenses that you can live without can save you hundreds or even thousands of dollars annually which you can allocate for a retirement fund. Having a retirement fund is essential and it is best to plan for it ahead of time.