Secure the retirement of your dreams with these easy moves

Retirement can be a daunting prospect. When you’re used to earning a regular salary, the thought of losing it and relying on savings and Social Security can be overwhelming.

The good news? A few simple steps on your part could set the stage for the retirement you’ve always envisioned – a fulfilling retirement free from financial stress. Here’s how to do it.

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1. Save from an early age

Giving your savings time to grow is about the best thing you can do in retirement. Imagine that you start making $ 300 per month at age 22, as soon as you enter the workforce. If you invest that money with an average annual return of 7% (more in a minute), you will end up with just over $ 1 million by the time you turn 67. Wait only five years to start saving, however, and you’ll end up with $ 719,000. It’s still impressive, but it’s a lot less money to live on.

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2. Save aggressively

The 7% yield we just used in our example? This assumes an IRA or 401 (k) that has invested heavily in stocks. If you play it safe with your investments, you could end up getting a much lower return which limits the growth of your savings. If you were to use a lot of bonds in your retirement plan, you might only enjoy an average annual return of 4% on your investments. And in that case, you’ll end up with just $ 436,000 instead of over $ 1 million, assuming the same $ 300 monthly contribution and the same 45-year savings window.

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3. Avoid debt

Accumulating debt can ruin your retirement, even if you rack up that debt years before your career ends. First of all, the more debt you accumulate, the more money you will waste on paying interest and the less you will have the opportunity to save. Also, if you carry debt into retirement, it will be an additional monthly expense that you will have to face, straining your Social Security benefits and withdrawals from your retirement plan. A better bet is to avoid unhealthy debt and limit yourself to the right kind, like mortgage debt or a car loan as needed.

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4. Increase your social security benefits

While you should go out of your way to save a nice amount of money to top up your Social Security benefits, you’ll still want those payments to be as generous as possible. And a guaranteed way to get more money from Social Security is to simply defer your benefits beyond full retirement age, that is, when you are entitled to the full amount. of your monthly benefits based on your salary history. For each year that you delay filing beyond this point, your benefits increase by 8%, up to age 70. Wait long enough and you could end up with thousands of dollars in extra benefits per year.

Maybe your dream retreat involves an exotic vacation and dining at great restaurants. Or maybe it means staying in the house you raised your kids in and enjoying local activities and hobbies. Whatever your vision, these simple gestures could be your ticket to achieving the goals you’ve set for yourself.