Wake Up Call: What Are Your Retirement Plans?

 

According to a 2019 report from the U.S. Federal Reserve, a quarter of American adults do not have any retirement plan at all.

They have no savings or pension at all.

One might argue that young adults are more likely to focus on student debts than on retirement plans.

However, the Federal Reserve report reveals that this alarming lack of preparedness is still present among some of the older demographics.

Indeed, 26% of Americans aged 30 to 44, 17% of those aged 45 to 59, and 13% of those over 60 have no retirement savings nor plans. 

If you find yourself in those demographics, it is time for a wake-up call.

Is it too late to prepare your finances for retirement?

The answer is a little more complex than a straightforward yes or no.

However, one thing is for sure; you can’t rely only on employer-sponsored plans only, such as the 401(k), when you’re already too late in your career. Smart investments and saving plans need to be your priority.

Where do you start with your retirement plans? 

 

#1. Include assets with low fluctuation

 

Individual retirement accounts (IRA for short) are supported by financial institutions and provide a backup retirement plan when you haven’t yet prepared any. Unlike other saving accounts, IRAs provide unique tax advantages for your retirement savings.

Most people are familiar with contribution-based IRAs, such as the traditional IRA or the Roth IRA, which are respectively deposited before tax and after tax. However, in a post-pandemic environment where currency values can fluctuate, it can be safer to consider solid assets, such as physical gold.

With a vast choice of accounts among the best gold IRAs available, the real question you want to ask is: What do I get from turning my investment money into physical gold? Gold prices typically move forward, unlike paper assets. Investing in gold is comparatively safer in the long term.

Worth noting, though: Individuals aged 72 and over are mandated to take the RMDs from a traditional gold IRA, which might force you to sell some of your gold to find the cash for the distributions.

 

#2. Amateurs, beware of high management portfolio

 

Foreign exchange trading enables market participants to buy, sell, exchange, and speculate on the exchange rates of different currency and currency pairs.

What makes the forex market especially attractive for new investors is its accessibility. You can practice with a demo account, placing hypothetical trades without any risks of losing money.

With an average daily amount of trading of $5 trillion, it’s fair to say that there are plenty of opportunities for quick wins. However, due to the high volatility of the forex market, poor risk management can have irremediable impacts on your portfolio.

Failure to use a stop loss or a take-profit tool, for instance, will mean that your trades are vulnerable to unexpected market fluctuations. But understanding how to use leverage and calculate risks to maximize your gain can help secure some of your retirement funds. 

 

 

#3. Consider best retirement spots

 

One of the most commonly overlooked strategies for your retirement funds is to move overseas. Indeed, while looking for a new home abroad may seem like a challenge, international retirement can be a sound financial decision.

Living costs and quality of life are some of the main factors you want to consider. Retirees expats living outside the U.S. have fallen in love with many countries around the world. Vietnam is one of those destinations that appeal to American retirees for its rapidly developing cities, inexpensive shopping, affordable luxury lifestyle.

Americans living long-term in Vietnam have revealed a monthly budget of under $1,000 for food, accommodation, travel, medicine, and everyday expenses. Another popular destination for US citizens is Panama, where expats on a retirement visa can benefit from a low cost of living (46% lower than in the US) and additional discounts. 

 

#4. Rely on property for retirement fundings

 

Real estate investments are not the first strategy that comes to mind for quick retirement funding. However, a rental property can produce a regular stream of income that can support you throughout retirement.

Financial advisors reckon that the relative inefficiency of the real estate market can be repurposed to find bargains with strong returns. However, if you have to borrow money to afford a bargain property, you should do so as early as possible. You can’t afford to invest in property with a mortgage as a retiree.

The location choice is likely to drive more value than finding the cheapest property. Popular holiday rentals tend to pay for themselves and drive a high source of income, which means that in a safe post-COVID vaccination environment, a vacation rental could support your retirement partially or totally. 

 

#5. Plan an active retirement program

 

The idea that you can’t work past retirement age is inaccurate and unhelpful. While, understandably, many professionals look forward to leaving the fast-paced work/life balance, retirees also enjoy remaining relevant and active in their later years.

From a mental health perspective, unplanned retirement can lead to depression and stress, even when finance is not an issue. Therefore, it can be beneficial to consider starting a side-hustle even as a retiree. Side hustles can be a reliable source of income to complete your retirement funds.

Additionally, they are also an essential source of stimulation and professional recognition. Ultimately, your mental health can dramatically affect your financial situation. As a retiree, you are more vulnerable to mental health challenges when you lose the routine of day-to-day productivity and outputs.

It is fair to say that a side hustle is unlikely to replace your professional income. They often act as a secondary source of money. However, the emotional benefits will also reflect on your budget. Depression can lead to financial losses, risky purchases, and loss of interest in money management. 

In conclusion, while it isn’t too late to plan for your retirement, it’s important to understand where the risks of each strategy are. Reliable investments such as real estate and gold IRAs can provide financial stability in later years. Fast-paced markets, such as forex, are a source of growing income. However, they will require knowledge and strict attention to risk management best practices. On the other hand, reducing your future costs in retirement can also be part of the solution.

Retirement destinations and side hustle strategies can transform your routine for the best. 

 

(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)

Daily Wealth

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