We’ve just celebrated another Independence Day, and yet most of us don’t know what it truly means to be independent–free of debt, living on our own, and adhering to our own rules.
To really be on your way towards independence, give the following tips–courtesy of Robert Powell of Marketing Watch–a try. You might just enter retirement a little richer!
1. SET ASIDE OF PORTION OF YOUR SALARY FOR RETIREMENT
Many of us–especially if we’re young–roll our eyes at such advice. After all, we’re young! We have plenty of time to save! But, how would you feel if you got to retirement age and realized how much more money your could have had, if you had started saving at your very first job? Don’t make the mistake so many young ones before you have made–START SAVING NOW. How much exactly? Powell says at least 11 times your final year’s salary.
2. SAVE EQUALLY ON INCOME AND EXPENSES
Once you reach retirement age you should have enough money to comfortably pay all your living expenses. So, in your pre-planning stages you need to calculate what your Social Security and any pensions will pay. Take that number and start subtracting. What’s leftover you need to come up with, and it’s advisable to over-estimate rather than not have enough. Also, if you would like to have money leftover to pass down to your children or grandchildren, consult with a financial expert or estate planner.
3. DON’T DESPAIR OVER #1
Some of you may not have 11 times your salary to spare–that’s okay! Contribute what you can. Some months will be easier than other. Maybe you get a salary increase and you can contribute 12 times your salary. Other times you may have been downsized and can only contribute 5 times your salary. Make allowances for what’s going on in your life and proceed accordingly.
4. LEAVE DEBT BEHIND YOU
Once you enter retirement you should have all your debt (including mortgage, credit cards bills, college loans, etc) paid off. Being debt-free is the ultimate in independence.
To read Robert Powell’s remaining tips, check out the rest of his article here.