Are You 40 Years Old With No Savings? Here’s How You Can Still Retire As A Millionaire
These days, 65 isn’t the age of retirement anymore as most people have dreams to retire by the age of 40. Where do you stand at 40 though? Do you have enough savings in your bank? Do you have enough in your pension fund? Sadly enough, Employee Benefit Research has shown that almost 34% to 37% of employees in the age group of 35 to 44 has less than $1000 in their retirement fund. The figure is alarming, and if you fall into that category, it is time for you to sit up and take things in your hands. But before you start panicking, calm down and remember that it is still not too late. Even if you do not have enough yet, you can still retire with $1 million if you start working toward it now, and we’re here to tell you how.
How Much To Save Every Month?
First, you need to figure out how much you have to save every month in order to get to the goal in the next 25 years. Turns out, $800 a month can do that for you. That would be 20% of an average of $50,000 in income. However, if you can work extra for 2 more years and take your retirement at 67, then the amount might go down to $650. Now that you have been saving up the right amount for your retirement, you need to figure out where to keep it. The easiest way to save up for retirement is to use the 401 (k) offered by your employer. Match 100% with your employer’s amount and get your savings up. If you have an option of investing in your workplace mutual funds, you can do that, too.
Does It Work?
Now, it is not as easy as it looks like. It might be easy to say all this hypothetically but to do it in real time might be a challenge especially for someone who already has a few debts. Experts believe that if you have only one loan for your home and have been able to create an emergency fund that will keep you going for 2-3 months, then it is totally doable. However, to make it happen, you need to control your monthly budget since the amount is not less than 20% of your salary. Living on a budget might not be your thing, but consider it once if you are really serious about your future.
If You Have Debts, Delay Investing
However, if you are in debt, then this is not the right time to invest. Student loans are a big headache and more often than not, retirement plans suffer because of them. The only way to combat this whole situation is to start budgeting. You shouldn’t wait for the time you go debt-free and then start with your retirement planning. Instead, start right now. Cut off all the extra expenses – things you can do without – and live on a shoestring budget just for a few years, and soon, you can clear up your debts and be back on track. If the debts are too big, keep the retirement savings away for now and concentrate on going debt-free by being on a strict budget. Once you are free of it, stay on the same budget so that you can put in more for your retirement funds.
Change Your Habits For A Better Future
You might have been clueless about savings and retirement funds all these years but you can’t stay like this forever. All it needs is a change of a few habits and you can easily save up a lot in order to afford fo your funds. If you find it a very daunting task to do all by yourself, take help from a professional. You might have to pay them a good amount, too, but if that helps you in your saving and planning for the future, so be it. Sometimes, having a job, balancing family life, and then taking care of your finances might become too much work. Remember, you are paying your advisor so that you can be stress-free, so the price is little compared to what you are getting.
It is not too late yet; pull up your socks and get started today. Living in a budget should be like a lifestyle choice, only then can you succeed. When you understand that saving every penny counts for your future, you won’t hesitate to do it.
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