Retirement Planning for the Mid Forties Couple
For people in their mid forties, financial planning can present a daunting challenge. They are often in a position which they have never found themselves before. Most people who have had children are seeing that their kids will soon be leaving the nest. In theory, this should leave them feeling slightly better off from a financial perspective. However, with only around 20 more years of work left, it can be a challenge knowing how much to save for retirement versus how much to spend enjoying yourself.
With all the recent global economic crises, millions of people are finding money a struggle, and with people living longer than previous generations, working well into old age is a serious possibility for many. Despite this, with careful planning and preparation – well in advance – retirement can be a comfortable, enjoyable experience.
The good news is that by getting started so early, you’re more likely to be able to secure yourself financially than if you wait until the last minute. It’s important to work out how much retirement is going to cost you. Would you like to spend more time traveling? Do you plan to move in with a family member? How much do you need to budget for your food bills so you have lower food bills? Would you like to be self-sufficient, relying on as few people as possible? These are questions which only you can answer. It is essential that you sit down now to work out a plan. If you don’t have an idea of what you will do during retirement, then you won’t be able to plan to achieve your goal properly. It might feel like these are big decisions to make so far in advance – and of course people’s circumstances and wishes do change over time – but if you start out with a general idea then you’re already halfway there.
Once you’ve figured out how much you’re going to have to pay out, turn your attention to how much money you will have coming in. Whether you have a private 401K or a pension plan from you employer, you are able to gauge to a certain extent how much income you will have. Will it be enough to cover your projected costs? If you find that there are shortcomings, meaning your liabilities will be higher than your income, then it is time to focus on putting money into a retirement plan. Now is the time as your income is most likely at its highest. Now is the time to sort out your retirement savings.
Obviously, regular expenses are going to be a weight on your wallet, so try and reduce it as much as possible before you retire. Make a concerted effort to pay off any debts and your mortgage – you may have to make some sacrifices while you tighten your belt now, but it will be better for you in the long run. Your goal should be to not have any financial obligations once you are no longer working.
Start setting aside money to save regularly. Bills have to be paid every month obviously. You have to decide on how much money you can afford to put aside and put it into your savings after expenses have been covered. The idea is to save first and to spend second. You must discipline yourself to stick to your savings plan. You can occasionally treat yourself out to a nice dinner, a new outfit or a night out with your spouse and still stick to your plan. It just takes self discipline and a focus on your end goal, retirement.
Furthermore, make sure that your savings are working as well as they can for you. If they sit in an account with a low interest rate, then you’re not making the most of your money. Seek out the advice of an investment counselor if you don’t wish to manage things yourself. Do yourself a favor however, take the time to educate yourself enough to understand the basics of investing. How often does your account compound interest? What fees will a financial planner charge you? Are you tracking these fees and reading your statements? Never fly blind when it comes to retirement planning. All too often, we place our money in banks, and leave it there for years on end. The rates are always changing and new options are becoming available. It is crucial that you keep on top of these things. Investigate all the different investment options which are available to you, and which one will be most suitable for you and your money. Do not be afraid to ask questions of your bank or financial planner. By staying on top of things, your money will continue to grow and do all the work for you!
Ultimately, this is the time to be sensible with your money. Take it seriously. You are investing in your future. Having financial worries hanging over your head as you grow older can be a real burden. In addition, whatever steps you take now will also benefit future generations, and whoever you decide to leave your money to. There is enough time now to plan a comfortable, enjoyable retirement!