It’s no secret that people are working much longer now. We all have met people in our places of employment that are much older than 60, and some even pushing the 70 year mark. The U.K announced a little while back that it wants to raise the state pension age to 68 by 2046. Could you imagine working close to your 70s? Your answer is most likely going to be no. Yet it still happens to many people. Whether it be due to an economic crisis, lack of retirement planning, or investments not working out, many of us will end up working much longer than we expected to.
What are a few quick tips to help your retire earlier? What are some ways to prevent working until you’re 70 (assuming you don’t have a job you want to do until the day you die) ?
Plan your own retirement income.
Don’t solely plan to live off social security or any other government programs. We all have different levels of risk tolerance, so I won’t be a smartass by trying to tell you where to put your life savings. Whatever your level of risk tolerance is, you need to match it with your own retirement investing plan. This could lead you towards purchasing a rental property as a source of income or even dividend paying stocks. Either way, you should strive to have your own retirement income.
Make sure you stop putting off your saving for retirement.
Take advantage of company offers.
Most companies offer money that is technically free through a 401(k) plan. You have really nothing to lose and everything to gain from this type of opportunity. Your company retirement plan matches the money that you put aside for retirement. Why not take advantage of this limited free cash?
If you’re self-employed, open up a IRA.
Just because you don’t have a company retirement plan, don’t let this stop you from planning out your future. There are many plans available out there for the self-employed and entrepreneurs. These plans are really important because since you work for yourself, you also need to plan your own retirement income.
Leave your retirement accounts alone.
If you want your retirement planning to be successful. Also if you want compound interest to work for you, then you need to leave your retirement accounts alone. It may be tempting to dig into your retirement accounts when finances look bleak, but it can really hurt you down the road when the time comes to retire.
Quick aside: There are legit and practical exceptions to this rule. For example, in Canada you can borrow money from your RRSP to put towards your first home purchase. You must of course pay this money back within a set amount of time. This is a rare exception where raiding your retirement account might be a half-decent idea.)
What age do you plan to retire at? Have you started planning for your retirement?