When looking for retirement information and retirement tips you haven’t heard before, it’s easy to get into a rut. Everyone seems to have the same advice:
- Invest as much as possible into your 401(k)
- Diversify your investments
- Start investing as early as possible
While these are all important points, there is more to planning for your retirement than maxing out your 401(k) contributions. Below are six retirement tips you probably haven’t heard before. Each of these tips will help make your years after you stop working more enjoyable and less stressful.
1. Focus on Physical Health
One of the best things you can today for your older self is to take care of your health. Health care is the single largest expense for most retirees. If you get your weight, blood pressure, and stress under control now, you will be much better off when you are older. You will also be in better shape to enjoy travel and recreation if you focus on your health now.
2. Start Saving for Your Big Retirement Trip
Many people have a hard time visualizing what it will be like to retire. This makes it harder to adequately financially prepare for that distant goal. One thing you can do is start saving for specific retirement events. Instead of just saving money for the time when you will no longer go into the office, you should plan and save for a big retirement vacation. This will make your retirement goals more concrete and will also give you something to look forward to, even if it’s still thirty years away.
3. Pay Off Your Mortgage Early
Your home can be a huge asset. However, your financial flexibility is limited if you are still carrying a mortgage. The earlier you can pay off your mortgage, the better off you will be in retirement. Not having a mortgage will give you more income to invest before retirement and will provide you with a more robust cash flow after retirement.
4. Become a Financial Planning Nerd
Knowledge really is power. The more you understand about how the markets work and how sound financial planning principles can help you build your wealth, the fewer financial issues you will have. Take the time now to understand different financial and investment terms like:
The more you know, the better questions you can ask your financial planner, and the more confidence you will have planning for your retirement.
5. Reduce Your Mandatory Monthly Expenses
Many retirees are on a fixed income. Once you spend all of your money, there is no more coming in. You want to make sure you have enough money to last your entire life so that you don’t have to compromise your standard of living. If you reduce the amount of mandatory monthly expenses now, you will have more money to invest, and you will have more disposable income when you retire. The smaller your monthly financial obligations are, the more freedom you will have in retirement.
6. Save for More than Retirement
It’s easy to have blinders on when thinking about long-term financial goals. But, while retirement is going to be your biggest financial goal, it shouldn’t be your only one. You should also be saving for things like college and weddings for your children. If you develop the discipline to start saving early for every big expense, you will have less debt, less financial stress, and more life options as your family grows.