This Is How You Can Reach Retirement Freedom In Ten Minutes
A busy life comes with a variety of demands that can overwhelm you. Job losses, job changes, sticking to a budget, repaying debts, running a family, are those responsibilities that you need to handle and thus, things become a lot harder. The coronavirus pandemic in 2020 has made things tougher. The upheaval in the daily life that the pandemic has brought with it is one of the worst challenges in recent history. Any more addition to the existing list of worries can break you down and you will automatically feel that you won’t be able to handle all these anymore. Well, things can be simpler and there are ways you can distill all your concerns into easy steps. The following tips would help you reach retirement freedom in ten minutes.
Minutes 0-2: Do A Retirement Cost Estimation
Doing a rough estimate will help you locate your goals. You will get an alert if you somehow get derailed on the basis of today’s actions. The main aim is to replace 70% to 80% of your income during the course of your retirement.
The financial planners take this as a generally accepted figure that gives you a clear picture of whether you will be able to maintain your current lifestyle on the basis of your current expenses. Now, if you think that your expenses might get higher, you will have to aim for a higher percentage. In case you think that you will be spending less, then aim for a lower percentage. You can even use a retirement planning app to do the cost estimation.
Minutes 2-4: A Contribution Rate Escalator Is A Right Option
To ensure a smooth retired life, you have to be financially stable. For that, you need to start saving early. However, most people fail to do so as they tend to think that they have a lot to do before they start setting some money aside. There have a lot of excuses of not saving. You will have to make yourself realize the power of savings and the benefit you are going to receive after you don’t have a source of employment.
A contribution rate escalator will make things easy for you once you decide to start saving. Through most plans, you now have the option to set your contributions to your 401(k) so that they can increase to a particular limit from one period to another.
Minutes 4-8: Assess Your Risk Tolerance
Being disciplined is the most important factor if you are thinking of making investments. Often, emotions tend to drive you while you are making investment decisions. Opt for a risk tolerance questionnaire so that you have the proper portfolio in cash, stocks, and bonds on the basis of how well you can handle risks and of course, a time frame that you deem suitable. Aside from that, you can also have a look into the world of managed accounts.
A large number of these options are being included within the employer’s retirement plans. If you aim to evaluate the offered options, you can opt for hybrid advisors, robot-advisors, or a managed account model. Just make sure that you understand the way these options work and of course, the fees that are tagged with each of them.
Minutes 8-10: Review Your Progress Periodically
With a change in time, things start changing. Therefore, to stay on track, your plans also need to change. This is highly applicable to your retirement planning. If you go through a major event in your life, you have to be sure that you are conducting a periodic review of your goals. That will help you to check whether you need to reprioritize them or change them according to the situation.
This way, you will have a clear idea of where you want to be in your retirement period. Try spending 10 minutes each year to check your progress and make necessary adjustments. Additionally, fix a date and time to consult a financial professional who will give you some valuable suggestions.
These are simple and effective tips that can set you on the right track as far as your financial life is concerned. You will realize a change as you will be prepared for the biggest concerns that lie ahead. Start working on them as soon as you can. Remember you can just spend 10 minutes to attain your retirement freedom.
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