You might not be within ten, twenty, thirty, or even forty years of retirement.
That doesn’t mean that you shouldn’t already be thinking about it. A lot of employees have their employers contributing to their retirement funds either automatically or incentivizing them to do the same.
Freelancers do not have any such deals or incentives, so it’s genuinely all too easy to put off even the notion of contributing to retirement for years. This can lead to major problems down the line.
Here, we’re going to look at the essential preparations you should be making towards that far off goal.
Pay Yourself First
If you’re self-employed, you might be asking “who else would I pay first?”
But what this actually means is that you could actively pay attention to financial goals, such as your retirement savings, and pay those out before you spend any of the rest of your money as a means to ensure you don’t overspend and eat into your retirement funds.
One of the best ways to do this is to use tools like Mint.com and other budgeting apps that can help you better divide your money.
This way, you can see how much of your income must be spent on essentials and how much can be divided between discretionary expenses and financial goals. Out of those financial goals, retirement should always be a consideration.
Know how much you need to retire
Retirement might seem like a fairly nebulous goal and you may want to put as much money towards it as possible with no upper limit.
However, when it comes to making a realistic goal-driven budget, then you want to know how much you need to save up in order to live comfortably by the age that you want to retire.
Pigly.com has calculators that can help you figure out a close estimate of how much money you should be putting towards your retirement. This way, you can least fit a baseline into your budget. If you want to save up more beyond that, then that is entirely your prerogative.
Don’t rely on savings alone
As mentioned, your savings should be, at the bare minimum, a baseline that can guarantee you some quality of life as you get older. However, if you want to live in relative comfort, you might need more than just a baseline.
Investing in other assets is just as important, as well. This might mean working to get a mortgage so you can have some property that you might later release equity on.
However, for many people, it’s going to mean investing in markets, such as trading stocks, bonds, on forex, and other exchanges. The more you diversify where your money is invested, the better you can effectively protect it against market changes.
The best day to start planning your retirement is today. So long as you’re making money, a portion of that should be aimed at securing your future. Otherwise, who knows when you can stop working?