Imagine a future where you’re financially secure. A future where you can spend your time going on adventures with your spouse, relaxing with your loved ones, and pursuing your deepest passions. This is a vision that many aspire to accomplish but often struggle to attain. In this article, we’ll explore how you can treat yourself to a bright financial future by embarking on the journey of retirement planning at an early age. This isn’t about sacrificing your present but learning how to live today with an eye towards tomorrow.
Where to begin?
Your journey of planning for retirement is one that is unique to you. You have your own interests, desires, and passions, and your plan should reflect them. To begin planning for retirement you must understand where you are today. This means getting organized with your finances. You can start by listing your debts, reviewing your budget, and doing an inventory of the assets you own. Once you have a clear understanding of where you are today, you can set goals for where you want to be in the future.
The goals you set for yourself will help guide the decisions you make on your journey to retirement. To strengthen your goals try using the S.M.A.R.T. acronym. This acronym stands for specific, measurable, achievable, relevant, and time-bound. An example of a SMART goal could be to invest 15% of your income in your employer-sponsored retirement account for the next thirty years. Or it could be to make an additional mortgage payment each month for the next ten years. Whatever the SMART goals you set for yourself are, it’s crucial that you monitor your progress towards them.
How to start?
After you have determined where you are and what you want to accomplish, you can begin taking action. For your first action, begin building a strong foundation. This foundation is built by paying off high-interest debt, having proper insurance coverage, and adequate emergency savings. Once you’ve laid the foundation you can begin the journey of investing for your retirement.
Starting out in this journey, your income is your biggest tool. To build your financial security you’ll need to save part of your income and invest it in an asset that can grow over time. The asset could be real estate, a stock market investment, a business, or a combination of all of these, but it’s crucial that you invest in something that will grow over time. If not, the money you save will lose its buying power due to the rise in costs of goods and services.
Why start early?
By starting early, you have time on your side. When you invest your money wisely, your initial investment grows over time, and the earnings on your investment generate even more earnings. This is known as compound interest. You can use it to your advantage by periodically investing small sums of money over many years. The longer you leave your money invested, the more it can grow, making it a valuable tool for funding your retirement later on in life. The earlier you start the more time you have for your money to compound.
Not only will time be on your side, but you can also reduce financial stress throughout your lifetime by having a well-thought-out plan for retirement. Knowing that you’re actively saving and investing for your future allows you to focus on the present while building your financial future. A plan also better equips you to navigate unexpected expenses and life’s uncertainties by addressing them ahead of time. The sooner you develop a plan, the sooner you’ll be better equipped for what life throws your way. A bright financial future is not just in retirement, it can be in every stage of your journey to retirement.
Don’t trick yourself into thinking that you should wait to plan for retirement. Treat yourself to a bright financial future by beginning retirement planning today. Your future self will thank you.
-by Jacob Young, AAMS®
Financial Advisor, RJFS
313 East 10th Ave.
Bowling Green, KY 42101
Phone: 270-846-2656
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of the author, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Ben Smith Life Compass Financial is not a registered broker/dealer and is independent of Raymond James Financial Services, Inc. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.
