Planning for Your Financial Future – 9 Simple Ideas to Help Boost Your Money

When Is Investing In a Roth IRA the Right Decision for You?

The financial future can be hard to predict. Do you know where you will be in ten or twenty years’ time? What will your life look like? What will the world be like? And, what state will the economy be in?

One thing is certain about life; we’ll all get older. Planning for our retirement is essential. There will come a time later in life where you may not be able to work anymore. You will still need to pay to keep a roof over your head and for food. Not only that but during your retirement, you should look forward to an enjoyable quality of life. 

Ideas to Help Boost Your Financial Future

But, how do you guarantee that you will be able to live comfortably in old age? It is possible to prepare for the uncertainties of old age, you just need to start as early as possible. Here’s how you can plan for your financial future. 

Clear Your Debts

As you move towards retirement, you will want to be debt-free. The lower your outgoings once you stop working, the further your retirement fund will go. 

Set to work on a plan to make sure that your debts are cleared so that you can focus on saving for your retirement. 

Use consolidation loans to bring all of your debts into one place. This will make them easy to manage and will put a final end date  

Don’t Put All Of Your Eggs In One Basket

When you’re putting money aside for your retirement, you should not put all of your eggs in one basket. 

Placing all of your money into one type of investment may seem like a sensible option. At least you’ll only need to pay attention to one financial product. 

However, if all of your retirement fund is tied up in one type of investment, then it could be at risk. If there is a problem with that investment, then you will have nothing to fall back on. 

Spread your retirement fund over several different types of investment. Just remember everywhere that you have put your money, and be sure that you keep checking on it.

Picking The Right Pension Plan For You 

Pension plans are one of the best ways of putting aside money that you can use to live off during your retirement and preserve your financial future. Start paying into a pension plan as early as possible, and put as much money as you can into your fund. 

Set aside money each month that you know that you can afford to commit. 

If you are struggling to find money to put into your pension plan, then you should visit your current income and expenditure and see where you can cut spending to make some savings.

You’ll need to make a decision over what type of pension plan to get will you get a 401k, a Roth or Traditional IRA?

Understand the differences between the types of pension plans. 

401K Pension Plan

A 401k plan is the most common pension that allows you to set aside money from your paycheck each month for your financial future. 

  • May employer match- this is where your employer matches your contribution to a certain limit.
  • You can select from different mutual funds. 
  • You can move your 401k pension between employers or change it into an IRA

You can often borrow from your 401k without penalty. 

Traditional IRA

  • An account you open on your own through a stockbroker or a financial advisor.
  • The money you put into your account will have already had income tax paid on it
  • When you withdraw from the account, regardless of your age, anything that comes out is taxable
  • You and your partner can both contribute up to $6,000 each year. This rises by $1,000 after the age of 50
  • You need to be 59 years and six months old before you can withdraw without penalty 
  • You can contribute to your IRA until you are 70 years and six months 

Roth IRA

In a Roth IRA, everything is the same as a traditional IRA with the following exception. Your investment grows tax-free until the age of 59 and your household income needs to be lower than $124,000. 

Investing In Property 

One common way of putting aside your retirement is to invest in property. This will help your financial future.

If you are able to start buying a second home well in advance of your retirement, you may be able to generate a rental income that could help you through your retirement. 

Hiring the services of a property management company will mean that you can be a hands-off landlord. The letting agent will find the tenants, take the rent, and arrange any property maintenance. You can just earn your share of the rent and get on with your life. 

Of course, if you own a second home, you could always sell it if you need to ever release the equity in the property. 

Cut Back On Your Spending

Spending your money when you have it is not going to help to see you through your retirement. Get yourself into good financial habits now and learn how to cut back on your non-essential spending to help your financial future. 

Where you do need to spend money, get used to shopping around for the best deals. Switch your utility providers often. Take advantage of introductory offers, but once the prices rise, it will be time to find to shop around for a more cost-effective alternative. 

Work Out Where You Want To Be In Life

Decide on where you want to be in your retirement. Are you happy living where you are now, or do you want to live elsewhere?

Start planning early so that you are in the home that you want to retire in and mortgage clear in time. 

Think about the practicalities of growing old. Will the house that you plan to live in need any modification for mobility issues?  Understanding that there may be major expenses required to modify your home will help you plan for these eventualities and your financial future.

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