Retirement is a lot closer than you may think regardless of how old you are. Whether you are 29 or 59, it is never too early or too late to start thinking about life after you stop working. No matter what stage in your life you are currently at, you can always be doing something to work towards your retirement. Read ahead for some ideas of what you can do at every stage of your life to be preparing for life after work.
What to Do When in Your 30s
While there is a lot you can do in your 30s to save for retirement, ideally you should start saving at the earliest age that you can. As soon as you hit 30, you should starting contributing to a 401k. There is a good chance that your employer has been putting money away for you in a company sponsored retirement account even if you haven’t paid attention to it or contributed any money. This means that you may already have a base to build upon for your future. Although student loans and other bills may restrict how much you can give right now, make it a point to put away some money from each paycheck to a retirement account. If you are self-employed, you can contribute both as an employer and an employee up to $51,000 in 2014.
What to Do When in Your 40s
By the time you get into your 40s, you should start to think about what age you would like to retire at and start making concrete plans to get there. Besides having a 401k or an IRA, you should think about other investment ideas and developing new streams of passive revenue. Buying real estate may be an option if you have saved up enough money in your retirement account. The best part is that money that accumulates in an IRA or 401k will not be taxed until you withdraw it. This means that you don’t have to pay capital gains taxes on real estate held in a retirement account.
What to Do in Your 50s
When you get to your 50s, you should know when you want to retire and how you will get there. It is important that you start paying off as much debt as you can. According to a social security attorney in Vallejo, it may be beneficial to start thinking about retirement communities in states that don’t have a state income tax. In addition to drawing down debt, don’t forget to take advantage of extra opportunities to contribute money to an IRA or 401k if you are over 55.
Retirement is an important milestone in your life. You have already paid your dues and paved a legacy for yourself in life. Now, it is time to sit back, relax and enjoy the reward for your hard work. If you have waited too long to start thinking about your retirement, consider meeting with a financial consultant to help you get caught up.