Tips to Manage Your Retirement Income if you are 30-Something – Part 2
Yesterday, we discussed some of the issues being faced by young people in their thirties when it came to considering their future retirement. Most – if not all – of these problems were related to the economic crisis suffered by the U.S. in the past years, which greatly affected almost all kinds of investments, as well as degrading the value of homes and similar properties.
Due to this, many young people seem to be losing hope in the future, since they see that in order to achieve their retirement goals, they will need not just to overcome many obstacles, but also to abandon many of the things they used to buy and to do. This is a major change for the worse in their lifestyles, which further deepens the sense pessimism that they are currently experimenting.
It is because of this that here we offer those in their thirties experiencing this troubles a few tips on how they can better prepare towards their retirement and be more optimistic while doing so.
Think in automatic investments:
Start saving more in real, tangible ways. While you might have good intentions to put away any money that is left over at the end of the month or week, this will only work if you actually have at least some money left. A great way to help you with this is to consider automatically investing a percentage of your paycheck every time you receive it. For example, you could have it invested in a 401 k orin a special savings account. Once the first few paychecks have being used for this purpose, you will start to adjust your budgets accordingly until you completely forget about it. If you start doing this, by the age 40 you should have near to two times your annual income in investments, which is definitely a nice amount. Use this amount as a reference to determine how much you need to set aside every month.
Diversify your investments:
One of the major problems faced by 30-somethings was that they had a significant portion of their funds invested in a house. So when that sector plummeted due to the economic crisis, they were heavily affected. Because of this, is you are planning on investing in a house, consider putting that money on other kinds of investments such as bonds and loans for exmaple.
Don’t try to achieve “financial miracles”:
If your total savings and overall net worth is lower than what it used to be a couple of years ago, do not try to recover everything with one single investment. Take Facebook as an example: How many people bought stock from the social network giant the very minute it started to trade only to see its value decline over time? Do not expose yourself to unnecessary risks even if the investments you are planning seem safe. This is usually a recipe for disaster. Think well and invest in little amount when you are not 100 percent sure of the outcome. IN the long, run, this kind of approach will yield better results.
Before we finish, just a piece of advice: If you are a 30-something and you are reading this, do not panic. You have plenty of time and your most productive period will still go on for a long while. However, that doesn’t mean you shouldn’t start planning and saving, that way you will never be much affected by inflation or tempted to win big in risky investments. Stick to the basic things and try not to overcomplicate things. Believe me, in thirty years you will be safe and calm.