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Retirement is always a thought that crosses someone’s mind whether we are entrepreneurs or working a nine to five.
Being able to have a good retirement plan in place or even being able to retire early is a bonus. People’s perception of what retirement looks like to them can be a million different examples such as, traveling different parts of the world this will allow you to appreciate the new life that you will live.
Some people appreciate sitting at home because it brings a sense of comfort; their used to being away from home so being at home feels comfortable.
Other retirees love being a mentor because they enjoy helping people and being a sense of guidance.
Another set of retirees hate not being able to contribute so they continue working a part time job or even running their own business.
Retirement is all about doing what you want when you want without having to listen to someone. Putting in thirty years to a job is an accomplishment, so it is important that your retirement is worth your while.
In 2021 a lot of people are preparing for retirement differently from years before because; the younger generation may not be guaranteed their social security, keep in mind a back up plan is always needed.
Determine the lifestyle you want to live
This is the most important thing you have to think about while planning your retirement. Like I stated previously above, you have to think about what you are going to do during retirement. Will you start your own business, travel the world, volunteer, spend time with your grandchildren and how will you take care of bills that unexpectedly come out?
Determine how much money you need to put aside to retire
Think about how much money you will need to live comfortably without working a nine to five. A great rule of thumb is to have eighty percent of your pre-retirement income before you fully leave your job.
You will also need to take into consideration that you will not be adding money to your 401k. Your pre-retirement income does not include things that you might want to do while you are living the retired life.
A great example of preparing for expenses that are not in pre-retirement income would be healthcare expenses or medical bills. You will need to factor in medical premiums and how it costs.
You will also have to think about what you want to leave your children as savings or what you will want to put aside for your spouse.
Think about adding passive income
I previously stated that it is very important to have a backup plan even when you are not looking for a full-time or part-time job.
Passive income is income that you can earn from a rental property, selling information products, affiliate marketing, stocks or advertise your vehicle.
In an article called “Benefits of Owning Rental Property: 6 Reasons Why You Should Invest” Andrea Collatz stated “Perhaps the biggest benefit to owning rental property is that it’s a passive income source. This means that it is a recurring income that requires relatively little effort to maintain. It can be an attractive option for people looking to make some money on the side, or even as additional financial security during retirement. Additionally, rental income may be taxed differently than employment income.
Having a rental property can be beneficial since it is residual income and it is guaranteed money coming to each month. You also have the option to move back into the property if something happens with your finances.
The rental property will allow you to develop a diversification to your investments. Another great example of investments would be investing in stocks.
Going with stocks can be a gamble requiring you to take a risk with your money, but as long as you are watching the information and buying stocks that are making positive moves instead of just buying what you like, you should be fine.
Getting involved with stocks will provide you with dividend income which consists of coming out annually. Dividend income also helps fund retirement accounts and helps your portfolio grow.
Start making as much money as possible
If your goal is to retire early you will need to start making as much money as possible to hit your goal to live a comfortable life.
Having different streams of income will help you in the long run when it comes to gathering your retirement plan and educating yourself on how to diversify your portfolio.
As I stated previously you can diversify your portfolio with stocks and rental properties. I have also witnessed a lot of people getting into forex trading which is a great skill to have when you are focused on retiring early.
In 2021 a lot of companies are offering forex trading some are multi-level marketing companies and others charge a ton of money to teach you how to properly trade. It is all about how you prefer to learn and how much you can afford.
If you become good at the skill you are able to make a good amount of money when you are able to read the graphs and see how each trade is going.
With each way, this will help you create the proper plan for retirement and have you ready to sit on the beach.
Each step will also prepare you to have a successful back up plan if one plan falls through. The main goal is to enjoy your retirement whether you are traveling, volunteering, spending time with your kids or grandkids.
The goal is to prepare yourself for anything that may happen whether it is a bill, medical issue, or even death that happens in the family. It is better to be prepared instead of always trying to make ends meet and ask friends for a loan.