The financial road to retirement starts with small, steady steps and ends with one giant leap to financial freedom for the rest of your life; or so it’s supposed to go. But most of us aren’t perfect, and we may have skipped a step or two, leaving our retirement nest egg a little light. If you’re worried that you’re not where you’re supposed to be at this stage of the game of life, take a look at these expert recommendations, as well as ideas for what you can do to correct any shortfalls.
At 30 you should have had a minimum of one year’s salary put away for retirement. Many women choose to use an IRA to hold retirement savings, but that’s not essential. The assumption for this figure is that you were earning a significant salary since you graduated from college. Another assumption is that you would be able to get an 8% annual return on your money year after year, which would leave you with $600,000 by age 65 if you had $40,000 socked away by age 30.
You can see that the assumptions are a little ambitious. The likelihood that you started earning $40,000 right out of college is slim. The chances that you were able to somehow save all that money at a young age are even slimmer. You might have had college loans to repay, a wedding to pay for, a down payment to make, and house furniture to buy.
The point is, you need to forget all this about being at a certain point at a certain age in order to have a comfortable retirement. The goals that financial experts put out there are rarely based in real life, and they just make you feel scared and inadequate.
As a 50-plus year old woman, you simply need to save as much money in the next fifteen years as you comfortably can, without sacrificing your current quality of life. It’s as straightforward as that.
There’s nothing you can do to turn back time. What’s done is done, so please don’t look at those online calculators and feel bad about yourself, that you somehow failed. You didn’t fail. Chances are, as a responsible woman, you saved what you could, and spent what you felt you needed to make yourself and others happy. Even if you haven’t saved a dime up until now, you won’t do yourself any good to feel bad about it.
The financial road to retirement lies in front of you. Try to put away 15% of every paycheck from here on out. Using a trusted financial advisor for guidance, put the money into your IRA, into the stock or bond market, or invest in gold. Keep an eye on your returns, and try to get a minimum of 8%.
Another possible option for you, if you feel you’re short financially, is to invest in real estate. A sound rental property investment could provide very steady monthly income for you for the rest of your life. If you’re 50 right now, you can take out a mortgage on a rental property, rent it for an amount equal to the mortgage plus insurance, and have it paid off by the time you’re ready to retire. After that, the rental income will pay for the continued insurance (never drop that, by the way), and supplement your retirement income.
This is how to build a retirement income. Look at your present situation, not your past. It’s never too late to start.