Are You Ready For Retirement?

For many, the idea of retirement means easing into a more relaxed lifestyle, having time to enjoy the things we love such as our hobbies, family and friends, travel, and recreational activities. However, for many approaching retirement, apprehension and worry about the ability to afford retirement is a very real concern. Luckily, there are some steps you can take to ensure a financially secure retirement.

Saving Your Money

Ideally, you should be saving 10–15% of your gross income for retirement. If you work in a company where your employer matches your retirement contribution then you can adjust your saving amount to add up to 10–15% of gross pay (for example, you get 3% then you can save between 7–12%). If you’re just getting started, you can start with a lower amount. If you start by saving say 5%, plan to bump up 1% or even 2% in the following year so you don’t really shock your budget. Boosting your contribution each year, you’ll get to the 10–15% level within 5 years.

The savings plan should be an employer-sponsored plan like a 401(k), 403(b), or SIMPLE IRA. Note that 401(k)s, 403(b)s, 457s, annuities are not subject to current income tax as they are tax deferred. Otherwise, open an IRA that allows for automatic contributions (automatic withdrawals from your bank account to the IRA on a scheduled day like your payday). It’s never too late to start saving. Just start off with a withdrawal schedule and plan to increase over time to get to your savings goal.

Cutting Your Expenses

Now that you’re putting money aside, you may feel an uncomfortable gap in your bank account but there is a way to get around that with some honest evaluation of your expenses.

There are probably a few things you can find right off the bat that you can cut back on. The best way to start is to create a detailed list of your spending (collect your receipts, bills, and banking statements) and see exactly where your money goes. There are always unexpected expenses, but what about the everyday and regular things? Smart spending on the little things can add up. For example, slashing out one specialty coffee a week instead of five, bringing lunch most days, and reserving a lunch out to once a month can soon add up. Saving on electric bills, gas bills, and phone bills can add up as well. What you save can add up to more than what you’re putting aside for retirement savings.

Investing Your Money Wisely

This is the part where you’ll need to get some professional advice from a financial planner or spend some time doing some research on investing your savings. There are online risk-tolerance tools that can give you some suggestions. Remember, your retirement savings shouldn’t be a mystery. You need to understand how it is invested so you know if it’s working to your best advantage. You’ve got a wide range of choices when it comes to investing your money. Consider stocks and bonds, real estate, mutual funds, and exchange-traded funds, as well as investment in gold, and silver.

With self-directed IRAs, you can have some say on where you want to invest. Diversity is also important to consider when you look at where your savings are sitting. (Hopefully, not all in one basket!) This part will take some time, consideration, and expert advice, but it will go a long way to maximizing your hard-earned savings.

One of the more popular alternative investments for your IRA is purchasing real estate inside your IRA. Due to the potential predictability and security of the asset, many Americans are making the decision to diversify their retirement accounts into tangible assets like real estate. With self-directed IRAs, you can invest in assets such as Land, Single Family Homes, Multifamily Properties, Commercial Properties, Mobile Homes and much more.

The Self -Directed IRA

A self-directed IRA is one that permits the account owner to invest their IRA in what they know best, free from the investment restrictions imposed by a more traditional brokerage style account. This allows the account owner to choose from the broadest possible spectrum of investments, including those not traded on a stock exchange. There are very few limits on what a self-directed IRA can invest in.

Start Taking Control with Quest Financial

While Joshua was attending conferences over the past few months, he learned about Quest Financial. He learned all types of IRAs, including traditional, Roth, SEP, and SIMPLE IRAs, as well as Coverdell Education Savings Accounts (CESAs) and Health Savings Accounts (HSAs), can be self-directed. Quest Trust Company gives you the freedom to purchase almost any type of investment including: real estate, promissory notes, LLCs, limited partnerships, private stock, trusts, oil and gas, tax liens, and much more.

If you are interested in hearing more about Quest, give Joshua a call at 608-306-1199 and we would love to answer any questions that you may have.