retirement plan

14 Steps to Plan for your Retirement in your 30s

When the idea of retirement pops up in our heads, different people have diverse ways or meanings attached to it. According to the U.S. Bureau of Labour Statistics, in the private sector, 4 percent of defined benefit plan participants could retire at age 55 after satisfying a service requirement.

When retirement is mentioned, we think of that period or a particular time in our life when we stop working either for a corporate body or personal enterprise. Now, during this period, some people use it as the opportunity to travel around the world, share more quality time with family, friends, or loved ones, look for other things to do for fun and relaxation.

A retirement plan is how you maintain your lifestyle even after you stop working. Unfortunately, most people make plans for almost everything in their life but a retirement plan.

Some people consider their children as their retirement plan. They expect that after they train their children, their children grow up (financially), and in turn, take care of them when they are old.

Some people feel like a retirement plan should start up within 45-50 years, ideally, one should start planning for retirement in their 20s. The earlier you start the more likely you can build up a sufficient retirement account.

The amount of wealth you’re able to build up in your retirement account over your working years will determine the kind of life you can afford during your golden years.

If you’ve missed out on starting your retirement plan in your 20s, lucky for you, your 30s is the next best time.

Planning a retirement in your 30s can be somewhat difficult sometimes, especially when you don’t have an idea of what to look out for. This article will help you get clarity on what to expect of and from yourself to build up a sizable retirement account.

Here are 14 steps on how to plan your retirement in your 30s:

1. Set up your Retirement Goals: 

When you have a targeted plan towards something, it keeps you in check of what you want hence, you go for it. It is so cool to have both long-term and short-term goals.

However, since we are talking about a retirement plan which is a long-term goal, it is only appropriate that it is planned in that way. Have a goal of what you want to achieve as a retirement plan.

How much do you want to have in your accounts?

What kind of life investment deal do you want?

What business to invest in?

These questions and goals keep you in check and focused on what you want and you work hard toward achieving them. A goal says; this is the direction you are headed for.

2. Calculate your likely retirement income: 

You should be able to come up with a proper estimate. Estimate your predictable income from sources such as employer pensions. To make sure your last throughout your lifetime, apply the old rule of thumb was that you can afford to spend 4% of your portfolio annually in retirement.

For instance, if you have $1 million in retirement assets that generate 4% annual returns, you could expect to afford to spend roughly $40,000 per year on ROIs alone when you retire.

Now, when you added to your other savings, social security, and pensions, wouldn’t that be enough to support the retirement you envision?

3. Set up a different account for your retirement:

As your income grows you should have a retirement account that is quite different from your account, you save yourself the temptation of spending extravagantly.

When you have a retirement account, you are already aware of your paycheck, all you need to do is automatically transfer a defined amount to your retirement account upon receiving your paycheck.

This also keeps you responsible, knowing you have a particular target at the end of each month. Endeavor to keep your retirement savings on a target, for instance, you earn $20,000 as your monthly paycheck you may decide to allocate $5,000 to your retirement account.

You will be amazed how much that $5,000 per month will yield for you in 20 – 30 years when you finally retire.

4. Have a budget: 

A budget gives you a breakdown of what you want and how to go about tagging each price for it so you don’t overspend. With a budget, you are sure of where your money goes and how it goes so you don’t wake up one morning and cry broke!

Having a budget helps to keep you in check so you don’t over speed and spend your retirement percentage. With a proper budget, you can allocate a particular amount for your retirement plan without jeopardizing your today’s needs.

5. Always prepare for the unexpected: 

Since you are already planning a retirement plan, it is best to prepare ahead for unavoidable eventualities in your lives.

If you prepare for the rainy day, you will not be faced with the temptation of interfering with your retirement plan.

Develop a separate plan to handle any emergency that may come up without it affecting your retirement plan.

6. Monitor your Expenses: 

It is very important to track your expenses to know when you’re overspending or not.  It is a proper app that helps you track your expenses, you are sure to be planning for your retirement.

When you don’t have a proper record of how your money goes out, it will be difficult to know plan your retirement because your financial strengths determine if you are ready to embark on a retirement journey in your 30s.

7. Start Investing:

This is always a good option. Invest for your retirement by going into stock businesses, real estate, I mean, go in for long-term investment.

There are investments that you can go in and you will keep earning more money even for your next generation. Money saved up in an account most times may not yield the kind of profit you’ll expect when it is invested.

8. Pay off your high-interest debts: 

Since debts help us to get serious and focused, knowing very well we have a responsibility to live up to, they are also major setbacks to a retirement.

It is advisable to make an upfront plan on a debt you need to clear so it won’t affect a retirement plan.

Learn to pay off debts. Set out a few dollars for it. Make it a part of your budget.

9. Adjust your budget: 

When you embark on a retirement plan, you need to slash down some things on your budget. There are things you need and things you don’t need.

When you plan a budget way bigger than your plans, you can always slash it down to fit into a perfect budget that will not affect your retirement plan as well.

10. Set up a Small Business: 

No matter how small the business will be, is a part of your retirement plan. You can check online to see the needs of most customers and now what kind of services you can offer.

Most times, people don’t run these businesses themselves. After, establishing a business under the guidance of a business expert and financial strategist, people employ managers who oversee their business while they stay in the background with a flowing income from their business or businesses while they enjoy their retirement.

11. Have an insurance plan:

By protecting your earnings, you can plan better for your retirement. Insure your property, things you earn money from, so when anything happens, you have what to fall back on without the fear of risking it all.

Lots of people fail to insure their properties; hence it affects their retirement plans when a tragedy happens. But with insurance, your retirement plans are secured.

12. Live within your means: 

Make a plan according to what you can afford. Do not purchase that expensive car if don’t need it and might cause you so much to buy.

Why don’t you settle for that affordable mortgage and save up money for your retirement? You can cook at home, refrigerate and microwave when need be, instead of eating out always.

Living above your means will surely crumble your retirement plan. Maintain a simple lifestyle that best suits your retirement plans.

13. Start a Side Hustle: 

You can help save for your retirement in your 30s by considering side hustles or by regularly getting rid of things you no longer use. You could turn your talents and hobbies into money-making.

No side job is small so long as it gives you a steady income. Identifying different ways to make money helps fasten your retirement plan especially when you have a particular amount you are targeting in your retirement account.

You can search for companies who are interested in employing a few people working for them for a few hours. This way you achieve a good result without taking out anything from your retirement plan.

14. Consider a personal finance adviser: 

Even though you speak to friends, partners, or parents, it is good to have that honest conversation with a personal finance adviser about your personal finance. The value of professional advice cannot be overemphasized. Make out that time to book an appointment to see a financial adviser on your financial situation. With a better understanding of finance, you can set and reach your retirement goals.

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