5 Tips for Your Financial Future
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Some of us are so consumed with our immediate financial situation, that planning for our financial future is barely a blip on our radar. Thoughts about “Why do gas prices keep going up?!”, “How can I afford my wedding?”, and “What can I spend my tax return on?” trump our attention span, leaving concerns about post-retirement income on the backburner of our minds.
It might seem like forever away, but your financial future is something you need to start now—before you regret giving it less forethought later. So how do you set yourself up for success during those Golden Years? Here’s some advice.
Set Up a Retirement Account
Hopefully this seems like a no brainer, but creating a retirement savings account while you’re young is so important that we needed to put it at the very top of our list.
Too often people assume that retirement plans, such as a 401k, are only available when offered by an employer—but that’s not true! An Independent Retirement Account (IRA) is available to both unemployed and self-employed individuals through countless banking institutions.
Different plans will have different restrictions regarding when you can access your retirement savings and how much you’re allowed to invest annually.
Depending on the plan you choose, you may be able to deduct your contributions from your tax return, effectively lowering your overall tax obligation.
Listen to the financial advice I wish I knew and pay yourself first by investing a minimum of 10% of your income into your retirement account—you won’t even notice the missing money, and your future self will surely thank you.
Protect Your Investments
If you buy a house before marriage, it’s critical you protect your investment to save yourself in retirement. While we’d all like to believe in the romantic, happily-ever-after, life happens. What if you break up? Who gets the house? Will either of you even be able to afford the house alone next year? What if someone passes away? Who holds the title?
When you buy a house with a partner before marriage, you’re not protected by any property laws. Securing a mortgage and purchasing property is a huge commitment that will determine your financial outcome far down the road, so be sure to protect your investment and avoid making any rushed decisions.
Tap into Equity
Later in life, you might run into unexpected costs such as medical bills or necessary home repairs that weren’t included in your budgeting priorities.
If you have trouble financing a sudden curve ball that life throws your way, or simply want to pad your income during retirement, you might consider tapping into a portion of your home equity.
Homeowners over age 62 may be able to secure a reverse mortgage to turn the equity in their home into disposable cash that can be used to fund all sorts of purchases.
From that dream vacation to that elite golf club, retirement life can be a whole lot sweeter with a little more money in your bank account—just use a reverse mortgage calculator to see the amount of proceeds you might be eligible for. Need help figuring out your Loan to Value ratio? Read all about it here.
Sell Your Land
If you purchased a mobile home despite the contrary advice urged by your family and friends, it turns out the joke might be on them. While it’s true these properties usually just decrease in their value over time, there is one credible reason for purchasing a mobile home: to later sell the land it sits on.
You’ve heard the saying before—they can’t build any more land. Land is scarce, becoming increasingly more expensive, and values will only continue to rise.
If you see a parcel of land for sale (especially acreage!) in a good area, snag it, sit (and/or live) on it, then sell it during your retirement years when price per acre skyrockets.
Earn Side Income
The allure of retirement stems, in part, from the ability to sit back, relax, and do nothing at all. As nice as that sounds now, trust us when we say that those idle hands will get bored—fast.
Turn your hobbies into side income by selling those handmade scarves online, narrating your favorite reads to create audiobooks, or earning money back for your online shopping.
You don’t need a personal finance coach to plan for retirement—use these easy tips to set yourself up for future success.
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