3. Envision Your Retirement Lifestyle
“People will say, ‘I want to retire in my 60s,’ not knowing what that looks like,” Kevin Couper, CFP at Sontag Advisory, told GOBankingRates in “Retirement Planning: How Do I Reach My Retirement Goal?” “Goals are the most important part of this process — you want to dig into it and get very detailed.”
Start by asking yourself, “How much money do I want to retire with and by what age?” Consider the lifestyle your retirement budget allows and factor in unexpected costs to add a buffer.
As it turns out, many people spend more during their retirement years, according to Niv Persaud, CFP and managing director and founder of Transition Planning & Guidance. “As they become less active, spending shifts to health care,” she said.
4. Learn to Spend Less and Save More
GOBankingRates estimated that in order to retire at age 65 with a $30,000 per year budget, the average 30 year old will need to save $20,000 per year.
While there might not be many shortcuts to meeting long-term savings goals, consider these retirement planning tips on living on less money:
- Drive less and use cheaper transportation
- Downsize your home or move to a less expensive area
- Cut back on entertainment spending
“5 Strange Ways to Save Money That Actually Work” offers numerous ways to cut back on spending, such as by getting a family cell phone plan with friends and making meals only out of items in your pantry.
But cutting costs is only half the battle when it comes to padding a retirement fund. In “Give Yourself a Raise in 2015: Emma Johnson of RetailMeNot Explains How,” Johnson offers income boosting advice that includes:
- Asking your boss for a pay increase
- Starting a side business
- Increasing billing, if you’re already a business owner