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Saving for the future can feel daunting and the approach that works best when you’re twenty might not be the best idea when you’re in your fifties. Though the strategies for growing your portfolio shift as the years pass, there are some overarching concepts that are applicable to all phases of life.
Read on for five steps you can take over the next few months to achieve the financial security you deserve down the line.
1. Start Now
The sooner you start saving for the future, the better off you will be. If you haven’t set up a savings account or you don’t already contribute to a retirement fund for work, make this your first move. Never underestimate the power of compounding interest. As little as $10 a month can equal tremendous savings in twenty, thirty, or forty years.
2. Pay Down Bad Debts
Resolve to not carry balances on things that have high interest. If you have numerous credit cards some paid off, some forgotten about, clean up your mess. Paying the minimums each month does little for your credit and can put you in dangerous financial waters down the road. If you have any high rate loans, speak with someone at your bank or a financial adviser and pay off what you can. Streamline your accounts so interest rates don’t surprise you and strip you of your worth.
3. Get Retirement Savings in Order
Re-evaluate your portfolio based on your current stage of life. When you’re younger, it’s ok to have a fair amount of risk as you have time to recover from any big losses. This could include day trading or simply high risk/high return stock options. As you approach retirement, you can balance it slightly more in favor of safer, low yield assets. If you’re wondering where to invest money, look online for cutting-edge financial advice. The financial planners at Online Trading Academy often have specific strategies for those new to the world of wealth management and can help guide you in the right direction.
4. Make it Automatic
Automatic deposits, either through your employer’s plan or through your bank is one way to ensure savings are there when you need them. When a percent of each paycheck is added directly into a 401K pre-tax, it is a win-win situation for the employee. You won’t miss the money (because it never even shows up in your checking account) and you are taxed at a lower rate because those funds are shifted to retirement savings immediately.
5. Give Back
Donating to a charitable organization of your choosing might not sound like an integral part of a retirement strategy, but the truth is, giving back on a regular basis has numerous benefits. First of all, it feels good to give. Studies show that people who frequently contribute to non-profits display higher life satisfaction in the long run. Additionally, charitable giving is typically associated with moderate tax exemptions, so you face lower taxes as a result of your gift. Finally, if you get in the habit of regularly giving a small portion of your income to those in need, you will be comfortable and familiar with tucking aside money into a savings account. It helps you control spending and practice budgeting.
Overall, planning for retirement doesn’t have to be an arduous process. With proper planning and a thoughtful approach, it’s never too late to start preparing for the future.