The concept of retirement is one of the most incredibly polarizing issues that we must address as soon as possible. On the one hand, there are some people who are looking forward to all the things that they’ll finally have time for, while there are others who dread what their life in retirement will look like. For both of these groups of people, finances represent a major uncertainty. Here are five tips on how to resolve this efficiently and retire in a much more successful fashion.
Five types of retirement
Based on the age at which you retire, there are, generally speaking, five different types of retirement. First, there’s a traditional retirement, one that requires you to train for the first decades of your life, then work for the next four and a half decades and retire at the age of 65. Then, you have an early retirement, which requires you to save for retirement from the moment you start working in order to be able to retire at the age of 45. Then, you have a temporary retirement and semi-retirement, which are not as common occurrences. Of course, there’s also the issue of a mini-retirement, which a lot of people avoid calling retirement, to begin with.
What are your plans for retirement?
Another thing you need to understand is the fact that based on the type of your retirement, you might need a different amount of money in your retirement fund. For instance, some people just want to move someplace quiet and live out the rest of their days in a similar fashion. Others want to start their own business. There are those who want to live out the rest of their days as adventurously as possible. Then, there are those who know that they’ll have to financially help their children and family members deep into their retirement.
Explore your options
While there are a lot of people who handle their finances on their own, the truth is that consulting an expert is, really, always a great idea. With proper guidance and assistance, you could even set up your own self managed super fund. By choosing an adequate firm to do this with, you’ll also receive assistance from professional accountants, financial planners and auditors. This kind of support is exactly what people who have a lack of experience in the business world need.
Creating passive streams of income
One more factor to take into consideration is the fact that your retirement doesn’t necessarily have to be the age that is completely devoid of income. Provided that you’ve earned yourself several pieces of real estate while you were working, you can still collect on the rent, thus consistently refilling your coffers. If you decide to start a business in your retirement, you might see a higher income than you did while you were working at your day job. Then, there are some investments that give a return over time. In other words, creating a passive stream of income can definitely come in as a handy idea.
Resolve all your debts in time
Finally, we’ve already discussed the issue of creating some additional streams of revenue; however, what about eliminating your debt, so that you can decrease the rate at which your funds are drained. There are many different methods to do so in time, ranging from consolidating your debt, all the way to leading a bit more frugal lifestyle. Just remember that taking money from your retirement fund in order to cover your debts might not be the best of ideas. In fact, it defeats the purpose of working towards a brighter future, to begin with.
One of the most important things that you need to keep in mind is the fact that retiring under favorable conditions takes a lot of discipline, effort and self-sacrifice. Still, this doesn’t mean that you have to “live for the future” or dedicate all your life to fulfilling your retirement goals. What you need to do is find a way to lead your life while fulfilling this important obligation to the best of your abilities. There is no reason why such a thing wouldn’t be possible.