Sometimes it feels like there are roughly 200 different “rules to retiring with money” out there. In an effort to keep things simple, here are three guidelines. Follow these tips and there’s a good chance you’ll head into your golden years with a plump retirement nest egg.
Take a Two-Pronged Approach
You shouldn’t wait until you’re debt-free before you start investing. An AARP report found that Baby Boomers have an average of between $6,465 and $8,158 in credit card debt and Gen X has an average of between $8,235 and $9,096. Simultaneously, one of the keys to retiring with money is to invest and do it early. According to Money, if you graduated at 22 years old didn’t start investing until you turned 34, you’d miss out out on about $4,358.26 in market gains. So try to invest and pay down debt simultaneously — even if the amount you’re investing is small. Then keep paying down your debt as quickly as you can. Don’t forsake one for the other.
Spread Out Your Income
One secret to retiring with a solid nest egg is to have a diversified income stream while you’re still working. This could be anything, from a side gig to good investments to property ownership. As you might guess, the more revenue streams you have, the more secure your retirement funds will be. If you lose one stream, you can fund your savings accounts with a different one.
Invest Any Windfalls
If you get a big tax return, an inheritance or a bonus from work, invest it right away. Taking this approach will help boost your savings and makeup for any times when you can’t afford to save as much as you’d like. Resist the urge to spend that big chunk of change. When you’re retired, you’ll be happy you did.