Thinking about retirement when you're young is hard, as I've detailed in my recent post about my possible retirement. I of course want to live comfortably and not worry about money when I'm older. I also want to travel a lot (hopefully my health is relatively good) and I have some sort of income coming in that is passive.
Having “just enough” money to retire is not my plan, I hope to save well above that. This is so that if anything does arise, that I know I will be safe. And we all know that I'm an extreme worrier right? 🙂
Talking to a financial advisor can definitely be important, but what about the little things that you know that you can do now? These little things can add up to big money in the end! $1 today is NOT equal to a dollar tomorrow! As most of us know from our business and finance classes, so definitely keep this in mind.
Passive income is important for me and our future. I don't want to be older and have no plan and no income coming in. Whether you have a pension annuity from a place like Saga Annuities or not, trying for regular income and savings while in retirement is very important.
Saving money NOW.
One thing that we are working on is saving money now. Yes, this money is not a whole ton of money as compared to what we put down towards debt, and yes we still spend money on having fun, but we do have money going towards our retirement.
We do realize that saving money now is good because you can take hold of how money can be compounded, and the longer you have it, the more you'll have in the end.
Snowflaking that extra money you have to a retirement account can add up quickly. Even if it is only $25, that amount can add up quickly right?
Not withdrawing from retirement accounts.
I have a SEP Plan (click on the link for more information on SEP Plans) that is well funded. My work pays everything into it and I don't pay a dime (as I cannot because that is a rule/requirement of having one).
I could withdraw from my SEP Plan and throw it all towards debt, but I'm choosing not to right now as I'd be penalized by my state and by federal for withdrawing from it earlier than I am supposed to.
Also, if your employer matches your contributions, then do so! Not taking the match is like saying “no” to free money. It's crazy, isn't it?
Think about how much you need.
Calculating how much you think you'll need is important. Yes, I do realize that this amount can be crazy high and might be too low or too high for what you might actually need (since you probably don't have a definitely idea for your retirement), it is still good to have some sort of general idea.
Do you want to travel for 20 years straight? Live in a house with 1,000 acres? Live in the city? What is your general idea for retirement?