Money-Saving Tips to help you Retire a Millionaire – Let’s face it, when you’re young, thinking about growing old is a scary thought. Will I have enough money to retire at an early age? Will I even have enough money to retire at all? Most Americans would love to retire at the standard age of 59 ½ or 67. But with the rising cost of everyday living, these targets are becoming harder and harder to hit. Increased Healthcare Costs, Rising Insurance Premiums, Housing Market Fluctuations, Energy Price Increases, and Growing Medical Expenses are digging into savings that were once thought of as your nest egg. To retire comfortably, you must start saving at an early age. If you follow a few golden rules, you can retire early and even be a millionaire.
Saving for Retirement
You must open an Individual Retirement Account (IRA) at an early age for starters. How early? How about right out of High School! You should familiarize yourself with two types of IRAs: the Traditional IRA and Roth IRA. Both investments have their benefits and drawbacks that your Registered Financial Consultant can go over with you. If you do not have one, ask your local bank’s financial manager to guide you in the right direction. You can also do a quick Google search of these IRAs. The search results will give you an in-depth look at how they work.
Once you have set up your IRA, a 401(k) Retirement Plan is a great way to invest your weekly earnings. Most large corporations offer a multitude of 401K plans to suit your needs. Some of these corporations even match your investment up to a certain dollar value. The maximum amount of money you can contribute to a 401(k) is $19,500 for those under age 50, and for those over are allowed an extra $6,500. You might think this is too much but believe me, it could be, but saving for retirement is essential. After a while, you won’t even realize it’s missing from your paycheck if you make small increases in your contributions annually. What started as small investments will compound itself into a nice nest egg in a few years. Here are some tips on 401(k)s https://kgmeyerpc.com/401k-tips/.
Debt Reduction
Now that you have an IRA and a 401(k), Debt Reduction is the next key element in striving for that early retirement. Reducing credit card debt should be your number one priority. Let’s face it. Most Americans live in debt. My advice to you is, don’t be one of them! Credit Card debit can consume a large chunk of the money you set aside each month for savings. With credit card interest rates as high as 21%, carrying a $1,000 balance can cost you hundreds of dollars each year if you pay the minimum amount due. If you are holding credit card balances on multiple cards that amount to over $5,000, you should consider a Debt Consolidation Loan. Your local bank can offer advice on these types of loans, or you can contact one of the Debt Consolidation Companies on the web to assist you. Just remember, when dealing with a Debt Consolidation company, they’re in business to make money. Unfortunately, many unscrupulous companies are not looking out for your best interest, so learn as much as you can about them before signing any papers. You can check the Better Business Bureau to see if they have any claims against them. If so, steer clear and look elsewhere and consider non-profit organizations if possible.
Where to Live
Buy a House; Do Not Rent! I can’t stress this enough. Renting an apartment is just throwing money away. When renting, you’re making someone else a millionaire! Here is a little story for you. When my friend got married six years ago, she asked me for some advice on married life. Well, my advice to her wasn’t about marriage at all. I told her to purchase a house instead of renting an apartment. She looked at me funny and said, “Well, we plan on renting for a little while to save up enough money to buy a house.” I told her that if she chooses that route, I’ll be visiting her in that same apartment five years from now. Sure enough, she chose to rent and is now stuck in that same apartment because she was throwing away $1200+ per month in rent for the past six years. She could have been making monthly mortgage payments that were building equity. I know it’s not easy to purchase a home these days but do whatever you can to save up enough for that down payment. There are plenty of programs for first time home buyers that can assist you. You can consult your local bank or reputable mortgage company about these programs. The only exception I approve of is in the event you will not be in the house over four or five years, the closing costs when buying and selling may be more than the savings of renting. Have a Registered Financial Consultant run the figures for you and see which is the best option. Here is an article that can help you make the decision https://blog.wealthfront.com/renting-vs-buying-a-home/.
Follow these tips, and you will be well on your way to early retirement. Start early enough, and you might even be a millionaire! Good Luck!
