I will start with one statistics here from which i will just point out this:
" The average working household has virtually no retirement savings. When all households are included - not just households with retirement accounts - the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households. "
Come on good people, will you ever learn your lesson?
1. Always, i repeat, always have a cash emergency fund of at least 3-6 monthly wages equivalent
2. Define your sources of income in retirement, how much savings you have, how much more you’ll need to be financially secure, when you can afford to retire by.
So dividends, interest, rental, royalties, profit as sources of income, i go 7k, i need 240k, as for now i will afford to retire at 54 (thanks for the Excel, Jmoney!)
3. How to begin to save more money for your early retirement? Think along the lines: avoid consumer debt, pay your credit cards balance, increase savings automatically, every time you got a raise, use it for more savings, avoid unnecessary expenses, recover lost money, consider new employment, cancel unnecessary insurance policies (this one is tricky), drive a used car instead a new one, side hustle.
4. Housing: downsize your home, relocate where you live, think about reverse mortgage or sale-leaseback, convert other assets, insure your inheritance,
5. Maximize your retirement savings: think tax deferred savings and employer-matching savings programs.
6. If you are close to retirement: maximize retirement plan contributions, use catch-up contributions, multiple savings plans and even switching employers, if they provide a better retirement plan.
7. Control investment expenses, maximize tax advantages, move to a low cost area,
8. For a risk adverse person: postpone your retirement with 1-2 years, phased retirement or no retirement at all (meaning find your perfect work that is not a work for you).
9. Avoid this errors: reaching for return, assuming Overly Optimistic Returns, all eggs in one basket, banking one lucky inheritance, following simplistic guidelines blindly, not investing for a lifetime, procrastination.
I hope you find this interesting, tell me if you have more ideas. I will be happy to add them.
G.
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