To many, especially we in the millennial generation, the idea of retirement may seem like a complete pipe dream. The cost of everything from home ownership to health care is rising, wages stagnate, and most of us are crushed under the weight of student loan debt. Our generation has all but given up on the final promise of the American Dream: being able to retire from work and enjoy the fruits of a lifetime of hard work and sacrifice.
But do we have to? There may yet be options for retirement still on the table for us. Unfortunately, we can’t reliably expect the traditional methods previous generations used – counting on working wages and employer contributions to retirement alone – to carry us. Like most other things in life, we’ll have to think outside the traditional boxes we were taught to find solutions to problems not of our making. Here, we’ll look over some lesser-known but influential methods to save for retirement.
Adding Stocks to Your IRA
You probably already know what an IRA is. Individual Retirement Accounts are precisely what it says on the tin: accounts set up with financial institutions where you squirrel away funds for your retirement, and anything you put into it is tax-free unless you withdraw it early. To most people, IRAs are the most basic and boring ways to set up a nest egg; unfortunately, they’re becoming less and less viable on their own. Many generations have to withdraw from our IRAs to cover unexpected expenses.
What you may not know is that IRAs are a lot more versatile than you may suspect. One of the best ways to contribute to your IRA is through stocks. While any store will do, some options are better than others. Generally, you’ll want a stable supply with potential for growth with little risk. For that, Lear Capital reviews precious metals as the best option. Precious metals are essential to many industries, especially gold and silver, for their uses in electronic parts and components.
Automating Savings
Knowing where to put your money strategically is vital to saving for retirement. This method is simple but highly effective. Setting aside a portion of your paycheck to go into a savings account, combined with your essential 401k and IRA investments, can give you a nice little nest egg to count on. It’s recommended that you plan for 80% of your yearly income for each year of retirement. For example, if you were to make fifty thousand dollars per year, you want to have forty thousand dollars set aside for every year you anticipate kicking back and relaxing. In this scenario, if you plan to be retired for twenty years, you’d need to save eight hundred thousand dollars by the time you retire.
That’s a staggering amount of money. Fortunately, you have a long time to save it up, and it’s a good idea to maximize how much you’re saving. By diverting a small percentage of your paycheck to a savings account, you can maximize your retirement contributions through no extra work. You can adjust your lifestyle to the hit your salary will take, and you won’t even know anything is being diverted after a few of them. This is a great way to passively generate some extra funds for retirement. You can find more strategies for automating your savings at https://www.kiplinger.com/personal-finance/banking/savings/601780/how-to-automate-your-savings-in-6-easy-steps.
Consider Moving to Another State
This is one of the most dramatic and unorthodox methods for maximizing your retirement, but relocating to another state might make what you’ve saved up stretch a little farther. Not only is the cost of moving potentially a write-off for your taxes, meaning you’ll get at least some of the expense back come tax season, but many states don’t have any state income tax. You can expect your retirement to go farther in Florida, Tennessee, Wyoming, Alaska, South Dakota, New Hampshire, Nevada, Washington, and Texas. Many of these states, like Florida, are already popular retirement destinations due to their climate and proximity to fun attractions. Click here to learn more about these states!
If you already live in one of these states, great! You have an advantage in the game right off the bat. Moving to one of these states before or after retirement might be worth your consideration if you don’t. Moving is never simple, but a little short-term stress and hassle in exchange for a more effortless, less expensive experience, in the long run, isn’t a bad thing. When it comes to making sure you’re going to be set after you finally stop working, it isn’t always enough to count on your ability to save up. Consider moving to end your career in a place that lets your savings go even further!
