Single and Thinking About Retirement? Five Tips to Help You Get There
Most of us dream about the day that we can take a break. We envision a full, long-lasting retirement that is free of financial worries and packed with more of the things we enjoy spending our time on. Whether you’re planning to retire at the traditional age of 65 or you’re aiming to get there earlier, being single doesn’t have to slow you down.
Use your unique strengths to your advantage, and plan for a retirement filled with time spent with friends and family, giving back, reading books, traveling, and everything else you enjoy. If you’re thinking ahead to your retirement, but you’re not sure where to start, here are a few tips that will help you get there:
Revisit your spending and saving
The start of your retirement planning is a great time to check in with your spending or looking at it in reverse, at your savings rate. Could you be saving more money? Are you spending on things that aren’t important to you? Are you wasting money anywhere, such as trial subscriptions you forgot to cancel that are now costing you money annually? Paying for a high-priced gym that you rarely use? Highlight anything you think can be cut out or reduced. Savings gives you freedom and it’s something you have control over, more than your investment returns or even your income. Then, use Vanguard’s handy retirement calculator to compare your current monthly income to what you’ll need in retirement.
Make small changes
Now that you’ve revisited your spending vs savings rate and identified areas that could use improvement, start making small, incremental changes. Save takeout or restaurant meals for weekends; make coffee at home instead of suffering through long drive-thru lines; cancel unused services or subscriptions. Discretionary items like these add up quickly to cost us thousands each year. Aim for improvement, not deprivation and watch your savings grow. Cutting out all discretionary spending isn’t sustainable long-term. Choose the changes and budget cuts that make the most sense to you and your goals.
Max out your savings
Reallocate the funds from your discretionary budget cuts to your retirement accounts or investment accounts. While opting for easy alternatives may have been eating up all of your extra cash, maxing out your savings opportunities will make you extra cash. When it comes to saving for retirement, compound interest is your best friend. Start spending time with her as soon as you can.
Any personal finance expert will tell you that it’s not enough to match your employer’s contributions (or fully fund your Solo 401(k) if you’re self-employed). Investing outside of your retirement account in mutual funds, ETFs, or individual stocks can help you create additional streams of income when you’re settling comfortably into your retirement.
Work a little longer than you think you can stand
While you are working your salary funds your expenses. When you stop working you are going to rely on other income sources: social security, maybe a pension, and withdrawals from your retirement and investment accounts. If your retirement projections are at all iffy – meaning, it seems your money may not last through your retirement years, it pays to stay employed. Most people want to maintain their standard of living in retirement not have to reduce it. Staying employed and savings as much as you can in those last years of working is one way to get you closer to your goal.
No one-size-fits-all plan for retirement
There’s no one-size-fits-all plan for retirement. But if your end goal is a retirement free of financial worries, there are plenty of actionable steps you can take now to set your future self up for success. A lack of financial stress helps us better connect with the people we love, sleep better, stay healthy, and enjoy both the destination and the journey. Employ financial strategies that will help you move consistently toward your goals.
If you need a retirement plan and want to work with a trusted financial partner, we encourage you to explore our services and schedule an introductory phone call.