By the time you are in your 30’s you should be on the road to building a solid financial future. Whether you think you don’t have the means to save or continue putting it off and will “save later” keep this in mind; more than one-third of American’s don’t have anything saved for retirement. (US Department of Labor) Many of you that are younger may find investing interesting, but not sure where to begin. Below are six great ideas of what you should be doing to prepare for retirement as young as 30.
1. Paychecks Save at least 15% of your income on an annual basis. You can even automate it, so saving is systematic.
2. Guard against lifestyle inflation. As your career grows, your salary is likely to grow. Yet, just because you have more money in the bank, doesn’t mean you should spend it all. Each time you get a salary bump, increase the amount you save.
3. Start envisioning your retirement. Your retirement may be years away, but having an idea of the kind of life you want during retirement is extremely important. Do you want to travel the world or spend time with family? Really think about the things you may want to do and the lifestyle you want. Keep in mind that you are saving now for the life you want later.
4. Pay attention to taxes. Taxes are not only a significant amount of your income, but they are a sure thing. Take a solid look at your accounts and options, and do the math. Paying taxes today rather than in the future may be more beneficial.
5. Rebalance your investments every 6 months. Invest in a well-diversified portfolio allocation based on your time horizon and risk tolerance. Every six months do a rebalance and make sure you are back in line with your intended allocation. Six months is a good check in to make sure you are sticking to your plan to reach your retirement goals.
6. Learn to negotiate. Research what similar companies and positions are paying as well as what added skills people in a similar position may have. Take the time to continuously invest and hone in on your skills. Negotiate and strategize with your employer to build the income you desire. Whether you have a salary of 30 or 300 thousand, the numbers will run the same. It is pivotal to not only start saving for retirement as early as you can, but to also understand how much you really need. Call today to meet with an Independent Financial Advisor for your complimentary review.