Learning how to start saving for retirement is a journey often fraught with confusion. Unless you’re a financial expert, it can be difficult to decide on the right investment strategy. One way to work towards your objectives and make saving for retirement easier is to learn from others who’ve “been there, done that.”
Senior citizens have a wealth of knowledge to offer — especially when it comes to saving for those golden years. Here are 4 things seniors can teach you about investing for retirement:
Learn the Skill of Delayed Gratification
Many senior citizens will advise young investors to learn to accept delayed gratification. This can be difficult if you’re on a limited income. However, paying yourself first before doing anything else can be extremely helpful when it comes to building your retirement nest egg.
Considering how much to save is often a top concern for young investors. Aim to save 15 to 20 percent of your income with every paycheck. If this proves difficult, it’s time to review your budget. Look carefully at your entire spending and figure out where cutbacks can be made. For example, you might decide to stop dining out as frequently or make coffee at home, instead of stopping by Starbucks every day. Small changes can add up to big results. As your grandparents might have told you, every penny counts.
Allow Yourself Some Enjoyment
This might sound like it’s in opposition to the previous tip, but you know what they say about all work and no play. Life-work balance is important to your happiness level, as is allowing yourself some spending money to enjoy.
There’s nothing wrong with letting yourself spend — even if it’s on something frivolous. As with anything, moderation is key. The difficulty is determining how much you can comfortably spend without negatively affecting your retirement savings. This is another area where a budget comes in handy.
If you find your account dwindling after saving for retirement and paying your bills, it may be time to make some budget adjustments. One way to free up more money is by reducing your utility bills; simply using less electricity or water can net you more “fun” money. Canceling cable or internet is another way to cut unnecessary costs.
Be Wary of Trends
The latest trends can be attractive; often because they’re hyped by marketing professionals who know how to pique consumer interest. Before jumping on the latest investment bandwagon, think about what your grandparents might have told you about following trends. It’s like the old saying, “If your friends jumped off a cliff, would you?”
Rather than blindly following the latest trends, opt for tried-and-true investments with a solid track record of positive performance. If you are tempted by a trend and want to take a risk, do your research before taking action and never use money you can’t afford to lose.
Take Advantage of Tax-Deferred Benefits
Investors who have successfully reached their savings goals will often point to tax-deferred benefits as one of the best ways to reach success. There are varieties of tax-deferred retirement strategies you can implement, including an IRA or individual retirement account.
A gold IRA can offer maximum control because it is self-directed. What’s more, gold is known as a historically strong investment with easily-liquidated global value. Best of all, you don’t pay taxes on your IRA until you cash it in when you retire.
By implementing these senior-approved retirement savings tips, you can get a handle on the investment process and give yourself a firm foundation for a solid retirement income.
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.