The longer you put off saving for retirement, the greater the risk will be of not having enough money to live comfortably in your golden years. But it might not be too late. You can still build yourself a comfortable nest egg if you commit to it. Here are some financial steps that can help you get there.
Estimate What You’ll Need
You probably have some big dreams for retirement. Maybe a dream vacation, or moving to a different home. Whatever the retirement you are envisioning, you should consider how much it will cost. Knowing what you want will help you plan how much you should save for it. Once you know, start planning for how much you will need to save. Some of your income will need to go toward this dream. If you need help determining how much you need and how much to save, consider talking to a financial professional.1
Paying off your debts is a good way to help you save more for your future. If you have high-interest credit card debt, make it a high priority to pay it off. Start by making a list of the debts you owe from smallest to largest. Any extra money you have should go toward paying off the smallest balance, while you continue making the minimum payments on the larger ones. Once you pay off the smallest balance, but the extra money toward the next smallest debt, and so on. Each time you pay off a debt, you’ll have additional funds to put toward the next. For help, try some free online and mobile debt repayment tools which allows you to track your debt payment progress. You can also look for ways to make extra cash to help pay off debt. Consider putting items you don’t need online, having a garage sale, or taking on a part-time job.
Cut Back on Spending
Reducing your expenses will free up money that you can put in savings. Start by putting the brakes on any spending that isn’t essential. Look for ways to cut low-hanging fruit like cable TV costs and going out to eat with friends. The closer you get to retirement the more important it is to shore up your finances. If you have issues with self-control, consider asking someone to serve as an accountability partner, and hold you to a strict spending regimen. You can also consult with a financial advisor, who will help you determine a spending budget that will maximize your retirement savings.
Look into Life Insurance Options
You can reduce your risk in retirement, and ensure your loved ones or dependents are protected financially, by buying health insurance, disability insurance, car insurance, and life insurance, which can help supplement your retirement income with policies that feature cash value growth potential. There are two forms of life insurance you should consider – universal life or term life insurance. Term insurance covers you for a specific number of years and pays out a set amount if you die during the policy period. Universal life (UL) insurance provides death benefit protection along with an added ability to build cash value with a declared fixed interest rate. You don’t have to figure out your insurance needs on your own. As always, you can talk to a financial professional1 to assist.
1. The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.