Saving for retirement plan seems to be difficult and very tempting to postpone. People in their twenties will think that saving up for retirement is too soon for them. And then they get married.
Then, they have children, and the education for them becomes the family’s main priority. Once again, no allocation for a retirement plan.
And the children enter a university, when on average, the parents would be in their forties already. No retirement again for this time, because college is the most expensive education one can afford.
Not until the age of forty-eight years old, the couple will have the time to think about their retirement. But at that age, changing professions is already impossible, or extremely difficult. No raise on the paycheck, and no coverage if the couple starts to think of investment.
Quite a grim story, right? Learn how to do better than those couple by reading this article to the end.
There is never too soon for an investment
The wrong mindset about investment is that you can postpone having one, while in today’s economic climate, if a person does not have any investment until the age of forties, then he/she is going to have a hard time living in their sixties.
The most promising and safe investment is in the property business. You can buy a potential property, renovate, and then sell it at a higher price. Or, you can buy a property for commercial purpose.
The first type of investment will cost you a lot of money, but the return will be much higher than its original price, especially if you have an excellent taste of architectural aesthetic. The second type will provide you with less income, but more stable than the first.
The trick for getting the most profit from buy-to-sell property investment is to have a sharp observation skill. You must know which cheap property in the suburb that has the potential to be profitable in the next two years. You need to be well-informed and constantly updated with the news surrounding your property.
Contributing to the 401(k) plan
When you have been working for the same company for years, your loyalty will be given back to you in the form of retirement plan, the 401(k). You can set up your retirement goals and the financial plan derived from your basic salary.
For example, your salary is 60,000 USD per year, and for your retirement goals you have allocated 6,000 USD, then that money will be deducted every year from you. The government gives tax leniency for 401(k) plan. From the example, you are only required to pay income tax on 54,000 USD.
Establishing your own business
This plan will be quite risky to do, but if you start early, you can overcome all the risks. Try to build a business when you are still in your productive ages, which is anywhere from the thirties to forties.
Start small, and do not leave your main profession, unless you are confident enough with your skill and financial condition. The goal is to nurture your business so that once you reach the retirement age, you can reap all the profits.