Retirement may seem like years away, but it will sneak up a lot faster than you think. Failing to plan for a comfortable retirement could potentially mean that you could be working until the day you die. Investing now will not only give you a comfortable nest egg, but it's going to allow your investments to grow over the years. To help you plan for a comfortable retirement, here are some tips you may want to use:
#1 Start Planning Now
It's never too early or late to start retirement. While planning can sound like basic advice, you will need a path to follow. Since there are so many ways to invest your money, start learning the ropes of investing. Whether it's real estate, stocks, bonds or certificate of deposits, set a plan so you can have enough money to live the lifestyle you're living today. Know how much you're going to set aside each month, and try to figure out what you will have at the beginning of each year. By having this timeline, it will give you a good idea if you're on track for retirement or not.
#2 Tax Advantages
Don't just invest into anything that claims to make you money. Instead, find an investment that will not only make you money but help you with taxes, too. The last thing that you want to do is withdrawal from your nest egg and find that the government is taking more than 20 percent.
Many employers have retirement plans that include a 401k or pension. If your employer offers any sort of retirement plan, try to sign up as soon as you can. Many employers will contribute to your plan which is like getting free money. If you know for certain your employer has one, get material to find out how it works and what you can do with it for when you change jobs.
#4 Live Below your Means
It's awfully tempting to use a credit card that has a large credit limit. Yes, it isn't free money and yes, it will put you deeply in debt. Not only that, you will have to pay outrageous interest rates. While there are good debts such as school loans and a mortgage, it's best to cut up the credit card and solely live on cash.
#5 Smart Investments
Those late night get rich infomercials are tempting to sign up for, but just remember that money doesn't come easy. Investments can take years before they pay off. The nice thing about starting at an early age means that you can aggressively invest. As you get older, you will want to take a conservative approach and only invest money that you can afford to lose.
#6 Avoid Early Withdrawals
If you plan on retiring at age 62, don't start withdrawing funds early at age 55. Not only will this throw your retirement off course, it could hurt you financially in the long run. When you invest your money, try to treat it as money you won't see until you're retired.
#7 CPP and OAS
While you don't want to rely on these two program for retirement, you don't want to forget about them, either. Try to figure out what you will make in the future, so you can accurately calculate the differences.
When you're ready to retire, always make sure that your income comes from a variety of places. By balancing these accounts and diversifying, there's no reason you shouldn't have a comfortable retirement.
Michele Golden is a driven blogger and artist from Vermont. She likes helping individuals save money, and make better decisions for their future. When she isn't blogging she's studying to be a independent broker or financial advisor.