So we all know that the key to retiring is saving your money and investing well. But there are a few other helpful tips you may not know that can help you retire the way you want.
The Magic Investment Number
There are several ways to invest your money, and investment styles often depend on your age. You can invest large amounts of money into high-yielding stocks that give great returns. The downside to this type of investment is that there is higher risk.
So what’s the magic formula for getting a good return without risking the bank? Financial experts put that magic number at 16.6%. If you can afford to invest 16.6% of your income (including an employer match) over 30 years, you should have a sufficient amount to retire quite comfortably.
But of course this number changes depending on how much makes you feel comfortable, at what age you wish to leave the workforce, etc. Your personal preferences will impact how much you need to save for retirement.
Take Care of Your Health Before You Retire
You might be wondering what your health has to do with your retirement. Taking care of yourself, exercising and making sure you have good healthcare has a huge financial benefit in your retirement years.
The better you take care of yourself, the fewer medical expenses you’ll have when you hit retirement age. Studies have shown that retirees who took care of their health in the years leading up to retirement, spent less money during retirement on health care issues. In addition to saving you a pretty penny, you’ll actually be able to enjoy those years in good health.
Invest In Your Career As Early as Possible
Gone are the days of sticking with one job until you hit retirement age. It’s quite common these days for people to work well past 65 years old, which had been the standard retirement age. So what can you do in your career early on to invest in your retirement?
Think carefully about taking on debt later in life. Assess the advantages of taking out student loans to get a degree against the potential income and life impact. If you do go back to school, choose the best program for the right price. It could help you get a raise at work and won’t be a bill you’ll be paying back in your 80s.
Although none of us can predict a layoff at work, do whatever you can to keep yourself employable if that worse-case scenario happens. Try to take on new projects at work when they’re available. If your work offers skill-up classes or workshops, take them. Every little thing you can do to make you a desirable employee will help you keep your job until retirement, or help you recover if you have a job change mid-life.
Photo Credit: SalFalko