To many of us, retirement seems like it is a long way off. The truth is that retirement is likely to sneak up on you quicker than you think. Your best bet is to start getting ready for retirement right now.
As you prepare for the future, there are some things you should be working on. Here are five things to do before you retire:
1. Contribute as much as you can. First of all, you should contribute as much as you can to your retirement saving efforts. The fact of the matter is that you probably aren't adding enough money to your retirement account each month. It would be nice if $50 or $100 a month was enough, but the sad reality is that it probably isn't.
Look at your finances, and figure out how you can contribute more. Start now to contribute as much as you can each month. As your finances improve, boost the amount that you contribute.
2. Get out of debt. Nothing drags on your wealth like debt. Not only do you have an obligation to someone else, but you are also paying interest. Interest is one of those things that doesn't actually benefit you when you pay it. It's money going to someone else instead of helping you build wealth.
Rather than be tied up with extra obligations during retirement, do what you can to eliminate your debt before you get to that point. More of your money will go toward supporting your retirement lifestyle, rather than making someone else wealthy.
3. Consider your lifestyle preferences. Don't wait until you get to retirement to make decisions about what you want your lifestyle to look like. The way you invest your money and how much you set aside will be affected by what you want your life to look like after retirement. Do you want to downsize, live in an active adult community, or travel the world?
Figure out what lifestyle you want to have so that you can plan for it appropriately. Get your lifestyle preferences straight now, and you can put together the right approach to your retirement saving.
4. Make a plan for hobbies in retirement. Many people get to retirement, and then find themselves at a loss. They aren't working, but they have nothing to replace that activity with. Sitting in front of the TV all day starts to lose its luster after a couple of weeks. The truth is that most of us want to be doing something.
Think about the types of things you want to do after you retire. What hobby would you like to pursue? Would you like to learn something new? There's nothing wrong with going back to school during retirement, working part-time at a job you love, picking up a new hobby, or volunteering.
In fact, these are all things that will help keep your mind active and occupied, and help you enjoy your retirement more. Think ahead to these things, and have a plan of action for retirement. That way, you won't feel at a loss when the time comes.
5. Maintain your health. Few things can ruin retirement (or any life stage) like poor health. You can't enjoy your retirement when your body is falling apart. If you want to increase the chances of a good quality of life during retirement, you need to maintain your health now, before you get older.
Start now to get healthier. Eat better, exercise regularly, sleep well, and take time to relax. And don't forget your mental health. Do what you can to keep your brain challenged and active. All of these things will help you maintain better health and improve the chances that you will be able to actually enjoy your retirement.
FMF writes at Free Money Finance, a personal finance site that helps readers grow their net worth. He shares practical tips that have helped him accumulate a significant net worth and can do the same for others.