For the past month, we’ve been exploring what to do to get ready for retirement. From budgeting to savings, from college planning to staying healthy, we’ve focused on one goal: taking advantage of the time you have NOW so you can have a decent lifestyle when you retire — a lifestyle that doesn’t include worrying about money.
Today, we’re going to focus on one last weapon in your retirement arsenal. I’ve saved this one for last because it may or may not happen to you. Its like sprinkles on a cupcake. If you don’t have sprinkles, you probably won’t miss them, but when you do get sprinkles that makes the cupcake extra special. I’m talking about unexpected cash.
Stock options. Inheritance. Bonus check. Tax refunds. Throughout your life you will encounter rare opportunities where unexpected cash comes your way. Rather than viewing it as a green light to go shopping or take a vacation, pretend the money never happened and put it in your retirement or savings account. I know that doesn’t sound like a lot of fun but if you’ve put off saving for your retirement until now, you need every financial boost you can get to help prepare you for retirement. A $5000 tax refund could double or even triple in 20 years. That’s much better than a new toy.
Let’s be realistic, dropping all the money into a retirement account probably won’t happen. How about paying off a debt? Wouldn’t it be nice to have one less bill to pay every month? And the money you save every month could go towards paying off another bill or used for savings. Whatever you do, resist the urge to “celebrate” with your new found fortune and go a spending spree. Worst case scenario, get in the habit of splitting your extra money: half into retirement and half for today’s pleasure.
We hope this series has gotten you seriously thinking about retirement…it’s no longer that far off in the distance.
Having a successful retirement isn’t just going to happen. You have to plan and save and budget. Even if you are one of the lucky people and you work for a company with a pension, you still have to make sure you’re staying relevant to minimize the likelihood of layoff. You need to budget so that your lifestyle expenses won’t exceed your retirement income. You need to save so that you’ll be able to handle unexpected expenses once you’re living on a fixed income.
And for those of you who don’t have a pension, you will be relying on 401K, IRAs, stocks or real estate. Remember the markets can be volatile. The strength of the dollar, the value of stocks, and appreciation in real estate are not guaranteed. Planning will help you be in a position to weather any storms that ARE going to happen.
Being proactive. Planning. Looking ahead. Delayed gratification. All of those little things now, will yield big benefits for you later.