With the right approach to saving and investment, now people are able to plan their retirement well in advance. We hear many success stories where some people could retire even by the age of 40 and enjoy their life pursuing other interests. It all sounds like a dream. With rising costs and inflation, how can people retire, when others are still struggling to manage in the money they are earning?
So there are some ways that can help you save a bigger retirement fund or for some other purpose that you have in mind.
- Move to a smaller house. Investing in real estate is a good idea but you do not really need that palatial home with a huge lawn and backyard when no one in your family has the time to take care of it or enjoy it. Maintenance of a large house also adds to your expenditure.
- Move to a better and yet cheaper area. You do not have to change coasts or states. But you can move a little away from the main city and get a decent place at a fraction of the price. Of course, factor in the place of work and the schools and daycare if applicable.
- Use all the resources carefully. Whether it is buying a book or sharing a carpool. Small amounts of money can be saved by thinking about it before spending. You can use the libraries and online resources for every need of yours. Buy only what you need and not what you want.
- Invest in 401 (k), and ensure that it is matched by your employer.
- Plan your investments in such instruments that help you to save a bigger chunk of money that is locked for a few years. This will help you to keep it saved and yet be available in case of emergencies. Try to get a better rate of interest.
- Keep your credit card debt to a minimum. You do need to have a credit card and good credit score. So follow the spending and repayment cycle diligently and always pay back on time.
- Save before spending your monthly earnings. Factor in all the expenses only after you set aside the amount of money to be saved and invested in some fund.
- Plan well and follow it up carefully. Keep revising periodically to ensure that it is still relevant to the long-term plan and is consistent with the present inflation and tax rates. Then small changes can be made to it if required.
If you follow all the tips diligently and plan well, then you can retire at an early age and that will give you ample time to travel and enjoy the other perks that this retirement fund will have in store for you.