Retirement feels so far away and you have financial goals that you want to accomplish right now, like buying a home and paying off debt. It makes you think that saving up for your golden years just has to wait.
Does this sound like a conversation you had with yourself? It sounds so rational, this inner monologue. But it’s nonsense. The truth is, the best time to start saving for retirement is yesterday. Second best today.
And if you are already thinking, “I can’t afford it!” Tell yourself to close it because you absolutely can. Saving for retirement doesn’t require a large sum to get started and you’re playing the long game anyway.
But first you have to get in the the game.
Do you want to retire at 65? Here’s what you need to know:
If you’re 45 years old now, 65 is roughly 20 years of work and savings (focus on saving). The year 2040 may sound like a distant future, but it will actually be hot. You can be prepared by actively investing money now to make a living later.
We’re here to tell you it’s not that hard. Here are six steps to get started:
1. Let a robot do the tricky things
If you’re saving for retirement with a 401 (k) that’s great.
But when was the last time you really checked in to your account, updated your retirement date, adjusted your assignments, and all that other fun stuff?
Use a robo-advisor to make sure your 401 (k) is on the right track for 2040. Blooom is an SEC-registered investment advisory firm that optimizes and monitors your 401 (k) for you.
Your first account verification is free and you can do it online in under five minutes. This is a great way to get to know your account a little better. Find out if you’re paying too many investment fees or if you’ve invested the appropriate amount of money in stocks or bonds.
If you are happy with the result of your first exam, great! If not, you can join Blooom for $ 10 per month. (Penny Hoarders get a special price of $ 99 per year with the code REEETIRE.) Your 401 (k) will automatically be adjusted to best suit your needs until you retire.
2. Invest like a land baron (even if you are still a tenant)
Investing in real estate is a smart way to diversify your retirement plan beyond stocks and bonds.
And you don’t have to have hundreds of thousands of dollars. You can start with a minimum investment of just $ 500. A company called Fundrise does all the heavy lifting for you.
Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate in the USA.
However, this is not an obscure investment. You can see exactly what properties are in your portfolios – for example, a row of townhouses in Snoqualmie, Washington, or an apartment building in Charlotte, North Carolina.
You can make money from quarterly dividend payments and a potential increase in the value of your stocks, just like a stock. The cash flow typically comes from interest payments and property income (e.g. rent).
(But remember: investing involves risk. While Fundrise has made quarterly distributions since 2014, dividend and principal payments are never guaranteed.)
You pay an annual asset management fee of 0.85% and an annual investment advisory fee of 0.15%.
3. Make your adults fit for the day
OK, a real conversation.
Part of planning for your retirement is thinking about how you will take care not only of yourself but also of those you love. If you died what would they live on?
So that you don’t have to worry, consider basic life insurance to take care of your spouse and children in case they suddenly can no longer rely on your income.
A company like Policygenius gives you an easy way to compare and buy life insurance. Unlike traditional vendors, this online-only platform lets you apply online and offers instant quotes from top vendors to help you make a faster decision.
To receive your offers, simply fill in some information about yourself and your health. Once you’ve decided on a life insurance company, you can apply online directly. A Policygenius representative will give you a quick call to ask a few more questions.
4. Get Rid of Faster Nagging Student Debt
We Hear You: Even if you make a commitment to save for retirement, your student loans won’t evaporate.
Give yourself a boost to pay them off through refinancing. A company like Credible could help you find a lower interest rate on your federal and personal loans. Other companies offer similar services, but we love that the average credible user saves about two interest points on their current federal loan.
Refinancing generally means replacing your laundry list with one (or more) loans that bring all of your student debt under one roof.
This could make your life easier with one monthly payment instead of several. It can also lower your monthly payment, improve your interest rate, and give you more time to pay.
It might seem like a small difference, but a lower interest rate can mean a ton of savings over time – which means more money needs to be kept for retirement.
5. Save as much as possible – with more than 20 times the average interest rate
If you can save some money for your future, that’s great! However, if your savings are in a typical bank account, your money is likely not growing as fast as it could be.
However, there is a legitimate way to grow it much faster than the average person – more than 20 times faster.
It’s with a mobile banking app called Varo. The FDIC reports that the average savings account pays only 0.08% APY *. However, if you open an online current and savings account with Varo, you will receive more than 20 times this amount in your savings account.
Oh, and there are no monthly fees.
We know opening a new bank account is not everyone’s idea of fun, but Varo makes it easy. You can open an account with just a dime and more than 750,000 people have already signed up.
This is one of the easiest things you can do about your financial future.
* https: //www.fdic.gov/regulations/resources/rates/