When was the last time you discussed your retirement dreams? Like most people, you might have set a few goals years ago, and you’ve been steadily working toward them ever since. With our economy improving, there is a good chance you will indeed reach those goals. However, it’s always unwise to take anything for granted. Follow these six steps to ensure that you’re on the best possible track to a secure retirement.
Consider your budget. Wondering how much money you will need in retirement? Assess your spending now, making adjustments for expenses that will change in retirement. This will help you figure out how much income you need to generate in order to cover your lifestyle.
Get rid of debt. When you begin to consider a target retirement date, consider paying off your debt first. If you enter retirement free of debts like credit cards, your income will stretch much farther.
Think of ways to increase your income now. If you make more money, you have more to save for retirement (via your TSP). Alternately, you might need additional income to pay down your debts. You might be able to earn more money by learning new job skills, or you might consider a part-time second job to earn a little more money.
Decrease your current expenses. If generating more income isn’t an option, decreasing current expenses can free up some extra money. Many people increase their cost of living each time they get a raise, but you can get ahead of the game by keeping your expenses level and putting extra money into savings instead.
Conquer the thrill of instant gratification. Spending money on unnecessary things can earn you the thrill of instant gratification, but the high doesn’t last long. If you can conquer that temptation now, you will get your budget under control, plus establish good spending habits that will benefit you in retirement. Each time you’re tempted to spend money, ask yourself whether this item is more important than your long-term goals.
Create a plan. No one arrives at a great destination without first mapping out a route! Sit down with us to discuss your retirement goals, and together we can create a step-by-step plan to help you achieve them.
