If you’re one of the majority of Americans that are don’t see how to make it to, let alone through, retirement, there are a number of things you can do to change the equation. Here are 10 powerful steps to consider:
Downsize your home. But wait, you say. I can’t sell now! My house is worth less today than before the 2008 crash!. Most investors hate to sell an asset, whether a stock or a house, that has lost value. We tell ourselves that if we just wait, the investment will rally — and then we’ll sell. The problem: That wait could drag on for years, and some investments never recover.
You may not make as big a profit as you might have liked on your current house, but chances are good that the home you buy will also cost less than it did three years ago. Not only will a smaller home cost less, you’ll also benefit from immediate savings in other areas such as maintenance, taxes, insurance and utility costs, savings that will compound over time. It’s just cheaper to own a small house.
Earn more between now and retirement. Your greatest investment, especially these days, is highly likely to be investing in yourself. If you can make say $20,000 a year more, well that’s an additional $400,000 in 20 years. Where else are you likely to make such money? Think about what you can do to make yourself more valuable in your current job so you can get a better raise or maybe a promotion. Should you change careers? What about starting a business? Yes, there are risks and you’ll have to work hard, but the rewards can really be worth it. For the last 200 years, starting and running a business has been the #1 source of wealth in the world.
Consider working longer. Even a couple of more years, either full time or part time, can often have a very favorable impact on the money and lifestyle you will have in retirement.
Work part-time in retirement. Retirement in this day and age can, and I think should, mean getting to pursue what you have a passion for. Many retirees pursue second careers teaching, consulting or otherwise passing on their skills and experiences to the next generation. Before you let this thought upset you, ask yourself: will life really be better if you completely stopped working? For some, it is a better life, but for most people it is not. The truth is that this very often makes for a better quality of life, that having something productive to do is part of who we are and what life should be about.
Consider living elsewhere, maybe even overseas. I wouldn’t rule this out without at least thinking it through and doing a little research on some of the alternatives and how well they’ve worked out for others. Sometimes it pays to challenge your status quo.
Spend less and save more. This is one of my favorite topics and must be included in any discussion about saving money. How to do it is laid out on my website, in my blogs and, in detail, in several podcasts.
Eliminate all debt except a first mortgage until you are in your 50’s, then try to eliminate that too. 75% of Forbes richest people in the world say that living beneath your means is the best way to insure financial success. These are some very powerful messages. As to how to get out of debt, here are some quick reads to get you started.
Make more on your investments. Almost every week on my radio show I provide overwhelming proof of the corruption and utter incompetence of the Financial Services Industry and the financial media, and that you really must take a DIY approach to money management. When it comes to how to invest your money, my website and my show podcasts are loaded with most of what you need to know.
Live a simpler life. Many people have learned that less truly is more. Personally, I’m one of them and love having a simple life. How complicated has your life become over the years? How many activities and obligations do you have every day, week, and month that you’d rather not do? How many things do you own that you don’t use? Do you really need such a big home? Do you live far from your job and commute hours each day, leaving you tired and with little time for your family or for yourself? Is everything you do and own really worth it? Do these things truly add to the quality of your life? Simplifying your life doesn’t necessarily mean doing without. It means living a less stressful, more balanced life, and having more time for the things you really enjoy.
Take good care of yourself. From a financial point of view, you are your greatest asset and unexpected health expenses are likely to be your biggest financial and quality of life threat during your retirement years. Good health is one of life’s great treasures. So take good care of yourself, because nothing, including money, can insure your future quality of life like good health.
More than anything else, insuring a successful retirement is about changing your mindset. What’s done is done, but don’t underestimate just how much you can change this game for the better.