Most people have a vague idea of what their retirement may look like, but not everyone actively plans for the future they want. If you want a retirement full of fun and adventure, you need to start making choices now that move in steadily in that direction. Here are 5 tips to start saving for an adventurous retirement so you can turn your future dream into a reality.
1. Make a Plan
A well-funded retirement doesn't just happen. You have to plan for it. Every step of your career should point toward its successful end. You can invest in an MBA at USC to give yourself more earning potential, making it easier to save for the future. Track your net worth so that you not only know where you stand financially at any given time but also can make reasonable decisions about how much you need to save to retire by a certain age. Identify potential earning opportunities, such as part-time freelance work or wise investments, that you can continue to depend on to supplement your savings once you retire.
2. Open a Retirement Account
Many people don't start thinking about retirement until they have established a firm career, but it's never too early to start saving. Talk to a financial planner about the type of retirement account that is right for you. Financial experts can help you navigate the difference between a Roth IRA and a 401(k) so that you can make the decision that makes the most sense. Once you have opened an account, designate a specific percentage of your income every month for savings. It's okay to start small, especially if you start in your 20s. You can increase your contributions later, and you may even find an employer that is willing to match it.
3. Get Long-Term Care Covered
You never know how good your health is going to be when you get older. It's great to plan for an adventurous retirement, but the onset of an illness may deter your plans. Some people save for retirement their whole lives only to have their savings eaten up by the high cost of long-term care when chronic illness hits, leaving them little to no money for travel or other plans. To prevent this from happening, talk to your insurance provider about long-term care coverage. Ideally, you'll never need it, but it can offset the expense of specialized care if you do.
4. Pay Off Debt
An important step toward retirement readiness is paying off debt. No matter how well they save, very few people retire with the same monthly income that they have when they're working. Cutting down on how much you owe is a good way to offset that decrease. Pay off your car and your house so that you only have to budget for taxes and insurance later. Get rid of credit card debt, and get into the habit of only charging what you can reasonably pay off every month. If you have a lot of debt, a debt management calculator can be an effective tool for paying it off more quickly.
5. Plan To Downsize
Living below your means is a smart idea at any stage of life. You don't have to wait until retirement to cut back. Are there monthly expenses you can cut now that would allow you to contribute more to your retirement account? You should actively plan to downsize when you retire, especially if you want to travel. Consider selling your house and looking for less expensive living options in the future. You may discover that you like the freedom to be able to move around easily when you are no longer bound to a location by a job.
Planning for the future doesn't mean you have to give up everything you love now. By following these few simple tips, you can make the small changes that are most likely to really pay off later.