What does your future look like in retirement? Will it consist of a steady income to maintain your standard of living or will it be a struggle just to keep up with the cost of living? In this economy of uncertainty, it’s difficult to foresee even as early as next year.
The fact is that many people who are either approaching retirement or have a few more decades until they’re eligible for Social Security have to make some hard choices and undergo a rigorous retirement plan.
A recent poll suggested that most people in their 50s say they will work part-time in their retirement for supplemental income. It also suggested that they have fallen short of their retirement goals.
Here are some tips for investing for your retirement.
The 10 percent
No matter how much income you earn always put aside 10 percent. If you do this with every paycheck for the rest of your life, you will not have a hard time in your retirement days. Unfortunately, the actual rate in Canada and the United States is less than five percent.
Diversify (correctly)
Having a mixture of investments and savings will help you reach your retirement goals. If you have just one savings account then there is a good chance you will use this as an emergency fund, for short-term purchases or as a means to pay off your debt.
By having money in a high-interest savings account, a mutual fund, precious metals, a safe and stocks, you will have a wide range of options to choose from in your winter years.
Planning honestly
How do you want to live in your old age? Do you want to travel? Do you not want to do anything except eat and sleep? These are important questions to ask when creating a retirement plan and noting how much you will need to live the life you want.
Job
Unless you’re a multimillionaire, it’s important to have a plan to obtain a part-time job in your retirement years. This way, you will have additional income, and keep yourself preoccupied instead of not doing anything, and spending your nest egg foolishly. Even iN your retirement days, it’s good to save a small amount of your income as a just-in-case measure.
Fight against inflation
With central banks all around the world inflating the money supply and devaluing the currency, it’s important to devise a plan to prepare your household for inflation in the next few decades. Some ways to hedge yourself against inflation include buying foreign currency, holding gold, silver and copper, investing in commodities and possibly Treasury inflated-protected securities (TIPS).