What do you think retirement will look like in 50 years? What do you want it to look like? A second home in Arizona to escape cold winter months? Traveling to all the places on your bucket list? How about a sense of financial security that can handle most unexpected emergencies?
Envisioning your future is central to planning for it. For most millennials it can seem impossible to pay for the current essentials — rent, bills, student loans — while also planning for the years ahead. However, postponing investment in future financial goals will most likely lead to some unfavorable circumstances and even dismantle the future most millennials hope to enjoy one day.
So, how can you effectively begin planning for your retirement today? Here are four practical tips to get you started.
1. Have a Plan
For most millennials, creating a personalized retirement plan can seem tedious at best and intimidating at worst. However, figuring out how to fund your years in retirement is the first and most important step to creating a financially secure future. Using helpful retirement planning tips can make the organizing and development processes even easier (and hopefully less intimidating).
2. Feed Your Funds
It can be tempting to spend any extra cash flow you earn on more immediate needs but stashing funds away today will allow for a more comfortable time in the years after work. Consider using any extra money you attain — think cash back on tax returns or a pay raise — towards your retirement plan. Keeping your retirement goals and investments a priority can lead to a more secure and successful future.
3. Research!
Retirement is likely to look much different in 50 years than it does now. It’s nearly impossible to predict what the economy will look like then. That being said, it is important to research what your savings might be paying for by the time you arrive at the age of retirement. Where will your investments go beyond the enjoyment of travel, taking on new hobbies, and general relaxation during your retirement years? Researching and planning accordingly can help you get a step ahead and hopefully save you from costly surprises in the future.
4. Avoid Costs and Find Savings Within Necessities
While it’s easier said than done, keeping your expenses down and searching for savings within life’s (necessary) costs is a great way to put more money towards your retirement. Clearly, there will always be unavoidable expenses in life — such as medical emergencies or house repairs — and they typically happen without warning. However, taking the time to research how you can cut costs and find savings on medical bills and other unexpected life expenses will help you put more money into your future retirement. Wasted money is always frustrating, at any age.
Millennials are certainly having to think of financial endeavors, such as buying houses and starting a family, much differently than previous generations, and planning for retirement is no exception. However, delaying crucial retirement plans could end up costing millennials the future they envision for themselves. If you can take the time to start planning and investing in a strategy now, your future self will thank you.
Brooke Faulkner is a senior rights advocate and mother of two in the Pacific Northwest. She loves spending time with friends and family at the assisted living facility near her home, and has collected more stories there than she can count.
