If you don’t plan now, you’ll regret it later.
Retirement may seem a long way off, especially if you’re in the beginning years of your career. However, the earlier you start preparing, the better off you will be when the time comes.
This is because invested money grows exponentially with enough time, and healthy financial habits begun in your youth set the stage for a strong financial future. Here are some simple ways young men like yourself can prepare for retirement without sacrificing fulfilling lifestyles.
Invest in Retirement Accounts Monthly
By far, the most effective way to ensure a comfortable retirement is to invest in retirement accounts monthly. Start with a 401(k) if your employer offers one; they often match contributions up to a certain percentage. This is free money, dude!
If you’re self-employed or your employer doesn’t provide a 401(k), consider opening a traditional or Roth IRA. In fact, you should do this anyway. A popular method is to invest in your 401(k) up to what your employer will match and to invest the rest of your savings budget into an IRA.
The beauty of IRAs is that both offer tax advantages. A traditional IRA lets you invest pre-tax money, temporarily relieving you of its tax responsibility until you withdraw it at retirement. Conversely, a Roth IRA lets you invest post-tax money and won’t charge you a penny in taxes when you withdraw it, even if you withdraw millions.
Keep in mind that if your modified adjusted gross income (MAGI) is $161,000 or above, you cannot contribute at all to a Roth. If you fall below that number, however, a Roth is an excellent choice for young professionals.
Pro Tip
Set it and forget it—automate your contributions to stay on track of monthly investing.
Get a Head Start on Estate Planning
Estate planning might sound like something only older people need to worry about, but getting a head start can save you and your loved ones a ton of hassle down the road. It will also make your retirement easier, as you won’t have to worry about planning your estate as soon as you retire.
Work with a professional to create a will that details how you want your assets distributed. DIY estate planning is risky, and though you should be literate in the area and capable of outlining your needs, professional guidance is highly recommended.
Live Richly But Not Extravagantly
Living richly doesn’t mean living extravagantly. You can enjoy life and still save for retirement by being smart with your finances.
Mainly, prioritize essentials and what matters to you personally, and let the rest fall aside. For example, you should obviously invest in the essential items every bachelor pad needs because high-quality products here will make your life easier and more comfortable. Likewise, even though it’s not essential, invest in your hobbies because those will greatly enhance your quality of life.
But, for example, don’t buy a new phone every year if you’re not a tech enthusiast and your old phone works fine. You don’t need it, and your retired self will thank you years down the road.
Have a Goal in Mind
Finally, having a goal in mind. How much money you need to save for retirement depends on the lifestyle you want to live. Do you picture yourself traveling the world, starting a new business, or simply enjoying quality time with family? By identifying your retirement dreams, you can create a savings plan that gets you there.
Conclusion
These are just a few simple ways young men can prepare for retirement. If we can leave you with one resonating piece of advice, here you go, bro: it’s never too early to get started!