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Posts Tagged retirement

7 Ways to Prepare for Retirement

Financial independence doesn’t just happen once you turn 65. It takes planning and living on less than you make so that you can save and invest. Regardless of your age though, it’s good to know that it’s never too late to prepare for your retirement.

Retirement on beach

1. Pay off Your Debt and have an Emergency Fund

If you have not finished paying off your consumer debt or do not have a fully funded emergency fund in place, you want to focus on these things first before you start setting money aside for retirement. You want to set up a debt payment plan that would see you free from your consumer debt within 2-3 years and then very quickly move your focus to getting that emergency fund filled.

When you’re dealing with a reduced retirement income, the last thing that you want to be doing is still devoting income to your debt repayment or emergency savings. The goal here is to make sure you’re on a solid financial footing and are in a place where you can enjoy your retirement income that you’ve worked so hard for.

2. Start Saving and Stick To Your Goals

The sooner you’re able to start saving for retirement and able to stick to your monthly savings goal, the better off you’ll be. Ideally you’ve put yourself in a place where you can begin setting aside 10-15% of your monthly income into your retirement account. If you’re debt free including your home feel free to put in more than this.

In your monthly budget, make sure that you have a line for retirement savings and that you are sticking to your savings goal each and every month.

3. Know Your Retirement Needs

What you’ll need to save is dependent on the type of lifestyle that you would like to have when you retire. Most financial experts suggest that in order to retire comfortably you should aim to cash flow 70-80% of your peak pre-retirement income.

This amount is not written in stone. Many couples can retire on 60-70% of their pre-retirement income providing that they are debt free and their children are financially independent. There are many retirement calculators that you can use to help you determine how much is enough when saving for your retirement.

4. Contribute to Your Employers Retirement Savings Plan

If your employer offers a 401(k) plan, you want to make sure that you take advantage of it. Not only will you be able to take advantage of compounding interest, but your taxes will be lower, your employer may offer a match to kick in extra money, and automatic deductions make saving easy.

If your employer offers a traditional pension plan, you want to make sure that you ask for an individual benefit statement (if one isn’t sent to you automatically every year) to see what your benefit is worth. If you are planning on a career change or changing employers, you also want to find out what will happen to your pension benefit.

5. Put Money into an Individual Retirement Account

Don’t just stop your retirement planning with your company’s 401(k) option or pension. You also want to make sure that you take advantage of the tax benefits that an Individual Retirement Account (IRA) offers.You can put up to $5,500 a year into an IRA and you can contribute even more if you are over the age of 50.

There are two different types of IRAs to choose from. If you go with a Traditional IRA, the yearly contributions you make are tax deductible on both your state and federal income tax while any withdrawals are taxed at your income tax rate. The Roth IRA provides no tax break on the contributions, but earnings and withdrawals are generally tax-free.

6. Find Out About Your Social Security Benefits

Social Security pays benefits that are on average 40 percent of what you earned before retirement. You can use a retirement estimator to see what your expected benefit may be as you get closer to your retirement age.

7. Ask Questions

When preparing for retirement, the most important thing you can do is ask questions. Not only ask, but make sure that you understand the answers that you are given.

Be sure to ask your employer and union about retirement planning that is available through work. You also want to talk to a financial advisor when setting up your investments to make sure that your investments are diversified and you are taking the appropriate risk level for your age, goals, financial circumstances, and your personal comfort level.

Your Turn!

  • What are your retirement goals?
  • What steps have you taken to help reach them?

 

Tiny House Vacation

After the Tiny House Conference I decided to take a long overdue break for a few days.  It’s been almost a year since my last vacation and I know part of living tiny is me needing to take more time for me.  So I booked a place in the mountains on a whim and loaded up the car.  The place I stayed was a small house or even a tiny house.  It would be perfect for retirement because it was just big enough to be comfy, but not too big, and everything is on a single level.  The house was gorgeous!  Perched high on a small mountain, in the mountains of NC it was close enough to drive to easily, but far away from everything.

For the most part I did a whole lot of nothing, which was the whole point!  I took some short jaunts out around the area to enjoy the awesome weather I had.  Here is a few photos of the place and my trip.

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IMG_1668This awesome fire-pit area was in the middle of the three units.  Each of the little houses were pretty much the same.  At night I hung out by the fire and chatted with the other folks staying there.

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IMG_1637Small efficiency kitchen that was pretty workable.  Maybe add another 2-3 feet of counter space to make it fully functional.

IMG_1644Neat architectural detail.  this form mimicked the outside roof line, nice detail.

IMG_1646Friendly cats came to say hello!

IMG_1648The entrance to Joyce Kilmer Old Growth Forest was named after a poet here is one of his more famous poems:

Trees 

I think that I shall never see A poem lovely as a tree.

A tree whose hungry mouth is prest Against the earth’s sweet flowing breast;

A tree that looks at God all day, And lifts her leafy arms to pray;

A tree that may in summer wear A nest of robins in her hair;

Upon whose bosom snow has lain; Who intimately lives with rain.

Poems are made by fools like me, But only God can make a tree.

–  Joyce Kilmer

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After Joyce Kilmer, I headed to the NC / TN border where the famous route 129 is, better know as The Tail of the Dragon.  The stretch of road is notorious for its 318 hair pin turns in only 11 miles.  Popular with motoring clubs and motorcycles its a fun road to take a ride on and has some amazing views.

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IMG_1656A waterfall on my way to Tail of The Dragon

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IMG_1659Highest dam this side of the Mississippi.

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The rest of my weekend was made up of taking naps, reading some good books and enjoying the campfire.

 

Have You Retired In A Tiny House?

RetirementSS-Post

Today I wanted to see how many of our readers have actually retired in a tiny house?  I am am doing some research for a project and wanted to see if I could find and talk with a few of you about you experiences.

If you have already retired into a tiny house email me:  ryan@thetinylife.com

For the rest of you who are thinking about retirement into a tiny house.  What are your top three questions you have specific to retiring into a tiny house?  Let me know in the comments!

 Your Turn!

  • What are your top 3 questions specific to retirement in a tiny house?
  • What are the biggest barriers to retiring into a tiny house?

 

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