As you continue to increase with age, the circumstances of life will put you in a position where you must understand that you still have to pay bills and provide for yourself from a financial perspective. Many people underestimate how quickly time flies. Before long, you’ll be in your sixties and you’ll be looking forward to retirement. However, if you don’t prepare for that time, you’ll be in a bit of trouble. Whether you’re in your twenties or thirties, there are a few milestones you’ll want to check off by the time you’re in your forties.
1. Pay off all of your unnecessary debt.
Student loan payments and car notes need to be things of the past once you hit your forties. Work diligently to pay off any debts that have piled up. Any outstanding credit card debt and medical bills should be resolved. Put yourself on a strict budget and relentlessly through money at the debt you owe. If you become consistent in this effort to climb out of the hole, you’ll be able to get out much faster than you think.
2. Maintain a fully-stocked emergency fund.
While the definition might be different for different people, a fully stocked emergency fund tends to be at least 6 to 12 months of household expenses saved in a savings account. Take a look at how much it cost to run your household and run your current lifestyle each month. When you take that amount and times it by 6 or 12, that’s the amount that you should have in your bank account for savings. When you do this anything can happen like a job loss or sickness, and you won’t be strapped for cash for a while.
3. Have a significant amount set aside in a retirement fund.
You can use different options when it’s time to set aside money for retirement. You can put money in a Roth IRA or use a 401(K) retirement account provided by your employer. Make sure that you are actively putting money into those accounts every single month. Do not make the mistake of solely relying on social security to cover your retirement because this is not a definite guarantee.
4. Maintain active investment strategies.
Don’t be afraid to put part of your retirement fund into an investment account. Make sure the investment account is something that is safe and will grow your money over time. Options like stocks, mutual funds and bonds can be wise. Don’t forget to do your research. You don’t want to make investments that are volatile because this is your future that you need to consider.
Also be a good idea to consider business investments as a part of your strategy for planning for retirement. If you decide to purchase a franchise, later down the line, you can sell that franchise. The money you make can go to your retirement fund. It’s a good idea to sit down with a financial advisor to come up with a strategy for investing for retirement that allows your money to grow over time because when it sits in a bank account it can only approve maybe 5% over each year.
Too many people make the mistake of thinking that retirement is so far away and they don’t really have to plan for it. You don’t want to look up and realize that retirement is only 10 years away. Make the necessary decisions while you are younger and prepare for the future.