The best time to start saving money for retirement is yesterday. The second best time is now. We should all be saving money for our nest egg so that we can rest comfortably (or go on your retirement adventures) when the time comes. These days, Americans are working longer – or going back to work – so that they can have enough money after their retirement age comes and goes.
If you haven’t started saving yet, now is as good a time as any. Saving for retirement doesn’t have to be boring or a chore. Try some of these examples on for size.
#1) Scrutinize Your Cash Flow
It is important to plan out how much money you need in order to retire comfortably and live out your retirement the way that you want. However, instead of leaving it at that, make sure that you’re focusing some of your efforts on creating effective means of securing reliable income each month. This may just mean a (better paying) steady job for you. However, if you enjoy your current career you and just want another way to bring in money for your nest egg, try other forms of investments:
- rental properties
- starting a side business (we’ll talk more about this in a bit)
- dividends and the interest associated with it
- a part time job
- selling extra ‘junk’ that’s just lying around your house (most people have on average $3,000 worth of unused items)
#2) The Rule of Three
Designating three different types of retirement categories ensures that you are diversifying your saved money. It also helps you organize the money that you’re bringing in and saving:
Short Term Investments: Use this account for present living. Investments that feed this account will help you maintain the lifestyle that you like. These include cash items and income assets with limited risk.
Medium Term Investments: This is money that you should store for around seven to ten years. Investments in this category include stocks with high returns (which are usually riskier than other stock investments), real estate, and alternative investments like artwork.
Long Term Investments: This is where you should focus on growth. Place your money and investments in this account to accrue a good amount of interest. You shouldn’t access this account until after ten years or so.
#3) Focus Your Tax Refunds
When most of us get our tax refunds, we get the urge to spend it on something for us. After all, we’ve worked hard and this looks to be a reward for all of that hard work, right? But look at it this way, over half of Americans save less than $25,000 in reserves (savings, emergency fund, retirement fund, etc.). So instead of spending it, why not stash your refund into an IRA or a tax-deferred account?
Side jobs are a great way to help pad your nest egg. If you’re getting close to your 50’s, you will have enough life experiences and have become enough of an asset to a particular company (if you’ve been in the same line of work long enough) that consulting may become an option for you. Go out and get some project-based work (which allows for a lot more flexibility).
#5) Hobbies and Crafts
Arts, crafts, and hobbies are a great way to make money. Who says that you have to be miserable while you make money anyway? Turning your hobby or craft into a decent source of extra income can take a little time but if you’re enjoying the work, it won’t feel like a chore. Websites like Etsy make this option easier than ever. Just remember to keep an open mind, a creative spirit, and don’t be afraid to try.
Saving for retirement may be a slow process but not everything is about the end result – you can also enjoy the journey. Choose the path that piques your interest and works best with your current work situation. Do you have enough time for a second job or work at your own business? Do you have the interest to save in real estate? Everyone’s path will look different.
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