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A Practical Approach to Your Financial Future

Retirement planning. You hear about it often because it’s that important. If you’re not close to retirement age, it might be difficult to find the discipline to save for that time in your life. 

Reality says you will eventually get older to a point where you can no longer work. The idea is to set yourself up financially to retire sooner and enjoy the new, non-working phase of your life.

Whether you’re just getting started or want to take a different approach to retirement planning, we’ll give you a few practical tips to get you there. 

1. Understand Your Vision  
Visualize how you see yourself in retirement. That image might be traveling, spending time with family, or taking up new hobbies. Think about what type of income you will need to actually live that lifestyle for 20 or more years. The amount you will need may seem overwhelming from the starting line, but with time and consistency, you’ll be surprised at how quickly your money can accrue.

2. Understand Basic Principals 
Retirement planning is especially daunting when you don’t have an understanding of how it works. Knowing the basic terms, options, and functions of a retirement account can give you the zeal you’re looking for to get started. You can also seek the guidance of a financial expert. Before you do, at least know the basics so you can have a meaningful discussion.  

3. Less Now is More Later 
It can be challenging to live within your means when you’re taunted by advertisements for all the things you want, but really don’t need. The idea to keep in mind is ‘things’ won’t bring you wealth. Wealth is a long-term goal. It’s something you build up to unless you’re born into it. Evaluate your budget and lifestyle to find out how you can strike a balance to have enough now while saving enough for later. 

4. Automate It
Once you have an understanding of retirement planning, it’s time to choose a plan and automate your contributions. When it comes to living in the now and saving for the future, most people will want instant gratification. When you set up recurring, automated monthly contributions to your retirement account, you remove the choice between the two. Not only will you likely get used to this and forget that money is even missing, but you will have simplified your life now and for the future. It’s a win, win. 

5. Focus on Savings Through Equity Assets 
We mentioned earlier that having ‘things’ in general does not build wealth. This is still true, though some purchases can actually work in your favor. For instance, your home may appreciate over time, building equity and becoming an asset in your financial future.

Your home is also a means to lower your living expenses for retirement. What sounds better to you? Retiring at 70 with a $2,000 monthly mortgage or retiring with zero mortgage? Make paying off your mortgage by retirement a part of your plan for the future. 

Source: Lifehack