Although everyone might want to enter retirement financially sound and secure, it doesn’t just happen. In fact, in order to set yourself up for success in your golden years, you need to start thinking about how to do so while you’re working. And the sooner, the better.
Here are five tips that can help you retire rich.
1. Find Ways to Cut Corners
It’s hard to separate your wants from your needs. But you can score easy money for your retirement by combing through your monthly expenses and eliminating the things you don’t actually need. Things like old subscriptions and club memberships that you no longer use could be an easy way to put more money back into your pocket and into your future nest egg.
Also, it pays to find cheaper alternatives for your cable, phone and internet providers. Look into switching to streaming services to watch your favorite television shows instead of opting for cable. In 2017, Netflix amassed more subscribers than some of cable’s leading companies, including Comcast and Charter Communications, according to Fortune.
2. Start Saving Early
While you’re young it might be hard to resist spending every dime of your paycheck on your immediate needs. But your retirement money isn’t going to grow itself. If you open up a retirement account and make small contributions to it monthly, you’ll be thanking yourself in your golden years. Consider someone who sets aside $350 a month at age 25. If he increases his monthly contribution by nearly 3 percent and continues to earn 7 percent every year, he can potentially save about $1.4 million by the time he enters his late sixties
3. Make Saving Mandatory
Many people treat saving as optional, but in order to have a respectable nest egg in the future, you have to treat saving as mandatory. Keep yourself accountable by opening up a retirement account or a 401k that subtracts payments from your paycheck automatically. The amount that you can personally contribute to your 401k is decided by the IRS and varies each year. In 2017 the highest amount an employee could add to their 401k capped off at $18,000.
4. Have a Side Hustle
With the job market being unpredictable, it’s better to have more than one source of income. If you have a hobby, see if there is money to made there. Some hobbies can be categorized as self-employment. If so, you could potentially make tax-deductible contributions to a 401k or a Simplified Employee Pension plan.
5. Change Your Area of Residence
It’s no secret that not all states were created equal when it comes to cost of living and affordability. So, if you want to keep your lifestyle while still storing money for your retirement, consider relocating to a different state, or even country. In your working years, search for a state that not only offers your dream job but that’s allows you to have an affordable lifestyle. In 2017 states Kentucky, Texas and Idaho were among the cheapest places to live in the U.S.