If I could do it all again: the pensioners’ investment advice for their younger selves

If you have ever taken the time to talk to retirees about their lives, you know that they can have wonderful stories and sometimes good advice on everything from relationships to money. In a recent head study, retirees asked to share some of the financial advice they would like to give to their younger people, and the top five answers, listed below, appeared each time.

If you follow these tips, it can not stop us from ever making a mistake in the money again, but if you stick to it as well as possible, you can give yourself properly in a comfortable future.

Old man looks at the young man who is dressed identically

Image Source: Getty Images.

1. Start planning for retirement early

Nearly 70% of pensioners said they would encourage their younger people to start their pension earlier in life: if possible. This is not always easy to do, especially for college students who have a lot of student loans. But even if you can only save a few dollars each month, it’s worth putting it down for retirement.

Your contributions to early retirement are usually the most valuable because they have more time to grow. If you invest $ 100 today and earn an average annual rate of return of 7%, it is worth almost $ 1500 after 40 years. That’s a profit of $ 1,400. But if you waited five years to invest that $ 100, you would only end up with about $ 1,068 after 35 years, more than $ 400 less.

Even if you only have an extra $ 5 or $ 10 account in your wallet at the end of each month after paying your bills and setting up an emergency fund, invest it. It will make saving enough for retirement much easier because you will have more investment earnings to cover your expenses.

2. Continue to teach yourself about finances

There is always more to learn about managing your finances. This is especially true for retirement planning because it takes decades, and many can change in that time, including the government’s rules on retirement accounts and our own lifestyle and retirement plans. We need to know how to adapt to these changes to keep our goals on track and make the best choices for our money.

One of the ways to ensure that we can do this is to keep asking questions and trying to do better. Learning more about investing can help you make smarter choices about where to store your retirement savings so you can grow your nest egg faster and perhaps retire earlier than you expected.

3. Stay healthy

Staying healthy may not sound like financial advice, but your health and finances can easily become intertwined. If you have poor health, you will probably need to visit your doctor more often and pay for more prescription medicines. You may also be forced to retire earlier than you expected, so that up to that point you struggled to come to terms with what you could save.

Focusing on your health by eating right, exercising regularly and learning healthy strategies to deal with stress may not help you avoid health expenses during your retirement altogether, but it can reduce them. This can lead to a longer and happier retirement with more money to spend on the things you enjoy instead of doctor bills.

4. Balance savings for the future and live for today

Saving for the future is essential if you ever want to retire, but you must also meet your needs and needs. The movement known as Financial Independence, Retire Early (FIRE), encourages people to keep their budgets to a minimum, to often refrain from enjoyable activities so that they can save as much of their income as possible and for decades. can retire earlier than their peers. There is nothing wrong with this approach, but it is not something that everyone will address.

If you are not doing something nice in the present time, it can be harder to stick to your savings plan in the long run. It is better to draw up a plan that is sustainable in the long run. Determine how much you need to save per month to retire if you want. And if that is not possible, consider postponing your retirement or looking for ways to increase your income in the present time so that you can save for your future and earn money now.

5. Make use of 401 (k) corresponding funds

Nearly 40% of respondents said they would encourage their younger people to choose a postponement percentage of 401 (k) that would enable them to benefit from their company competition. It’s free money you get just for planning your future, but it’s a limited time offer. If you do not put enough money into your 401 (k) during the year to win the match, you forfeit it.

Hopefully you already contribute at least enough to your 401 (k) to get your full match, but if not, the first step is to find out how your business’s matching system works. Some may offer a dollar-for-dollar contest, while others offer $ 0.50 on the dollar. Most companies compare your match to a certain percentage of your revenue.

Once you know what to do, try to increase your contributions accordingly. You may need to budget, but it’s worth it because it reduces the amount you have to personally save for your retirement.

The five answers above were the most common pieces of financial advice given by pensioners, but they are not the only ones worth following. Think about your own financial history and what you want to improve on. Then seek advice on how to do it.