Sunday, February 12, 2012, AM | Leave Comment
I am collecting social security for some months now. I had been unable to get a job so I figured I should get some monthly income to live on. I was about 8 months late to apply for the benefits. When I was young and working, I never thought about retirement let alone save for it. I realized to the contrary when I was laid off a couple of years ago that I don’t have much in my retirement account.
But you are young, have huge potential of making good money whether you have been to college or not. First off, you must change your mindset about spending and saving. You must change your attitude towards money, learn what money is and how to handle it so you can increase your savings and investments, especially for retirement.
It is definitely important how much you are making but more importantly how best you manage your finances. If you are able to put together retirement accounts, investments or financial plans and not do it while you are still young, you would end up like me with only social security check to spend and nothing else.
If you want to live in a reasonably comfortable retirement, then starting today put a little aside in your retirement account and invest it. By the time you retire, you will have considerable cash and assets to live in relative comfort.
You can start working towards the retirement goals now. There are few issues you should concentrate more before you retire:
- Paying off your mortgage debt
- Starting to build and use a realistic budget
- Keeping your full-time job as long as you can
- Maintaining your health insurance
- Beginning to work with a financial planner
You should own your home outright by the time you retire with all your mortgage debt paid off. Any other significant debts should also be paid off or minimized to more manageable amount. Once you retire, the only other expenses that you should be obligated for are your insurances, taxes and maintenance costs.
Start budgeting and stick with it till you retire. That way you would have more cash and assets in retirement besides your social security paycheck.
Start with a simple budget which has your predictable monthly income on one side (Revenue) and your individual known monthly expenses on the other (Liabilities). If your expenses are more than your revenue, you may need to cut back on your unnecessary expenses.
Benefits of Investing while you are young
There are very many benefits when you start investing while you are still at the prime age. Don’t delay investing for your retirement. Save money on taxes by contributing to 401(k) plan or other employer based plan.
The longer you save, the more your principal will grow with compound interest. Also, you can take more risk while young. You are able to make high risk investments which yield higher rewards.
In a Nutshell
The more organized you are while you are young, the better off you would be in retirement. The sooner you start saving for retirement and investing it, the better off you would be in retirement. You would be content with no financial worries.