Tag Archives: retirement savings

Investing in NFTs: Can You Buy NFTs in your Self-Directed IRA?

Investment Strategy, Risk Tolerance,

This post was contributed to Leisure Freak by content creator & digital strategist Akanksha Malik.

Although traditional investment options still exist in the stock market, there are many more new types of investments being utilized. One of these new investment options is Non-Fungible Tokens (or NFTs) which are quickly emerging as an investment choice for many investors.

NFTs are a relatively new way to invest in cryptocurrencies where each token is uniquely identifiable by its owning party. While this can lead to some confusion, there is still much more information on how self-directed IRAs can go forward with investing in NFTs, such as how they can transfer tokens and how they go about buying them, selling them and even storing them. In this article, we are going to discuss the same.  

Investing in NFTs: Can You Buy NFTs in your Self-Directed IRA?

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What is an NFT?

An NFT is an asset that is supported by a blockchain and can be traded like a traditional stock. The name stands for Non-Fungible Token and describes the idea that each token is unique and has value, unlike traditional stocks.

NFTs are similar to cryptocurrencies, but they’re not decentralized, meaning no one is in charge of keeping them safe, secure or reliable. Instead, NFTs are secured by the blockchain ledger that keeps track of all transactions made with them.

Example: A digital artwork can be stored in a smart contract on the Ethereum blockchain and will be transferred to someone if they pay with Ether (the currency used for Ethereum transactions).

NFTs are different from other cryptocurrencies because they’re non-fungible — meaning each asset has its own unique characteristics and cannot be exchanged with another. An NFT can’t be sold or traded like a stock because it’s an individualized piece of art or physical object that doesn’t have monetary value outside of its rarity and uniqueness.

NFTs are becoming more popular among investors because they offer several advantages over traditional investments like stocks and bonds. One of the main advantages is security — NFTs are almost impossible to counterfeit because they rely on a decentralized blockchain ledger system for storing information about each piece of art.

If someone tries to alter or fake one of these pieces, all of the information about that piece will be changed in response — making it impossible for anyone else to duplicate this work without access to every single piece of data about it.

What is a Self-Directed IRA (SDIRA)? 

A self-directed individual retirement account (IRA) is a type of retirement account offered by most financial institutions. This type of investment account is designed to help you invest your money in the manner that best fits your personal goals and financial situation.

You can set up an IRA anytime, and it doesn’t require any details on your income to open it. You can choose how much you want to contribute, what types of investments you want to make, and when you want those investments to be made.

A self-directed IRA allows investors to make all investment decisions on their own. They are also able to direct their own investments through buying, selling and redeeming shares within the account. A self-directed IRA can even allow for a tax deduction for certain types of assets like stocks and bonds.

Can You Buy NFTs with Your SDIRA? 

The short answer is maybe. This is because there are essentially no rules in place for self-directed IRAs to invest in digital assets. You can use a Crypto IRA to invest in cryptocurrency; however, there are some important things to keep in mind before investing in NFTs.

First, NFTs are a gray area right now as the IRS hasn’t yet issued specific guidance on NFTs, nobody knows for sure if they will count as collectibles. As such, you should consult with your legal advisor before purchasing any NFTs or other digital assets, as they may not be eligible to be held within your IRA account.

Second, it’s important to note that since NFTs are considered property rather than securities or collectibles — meaning they don’t meet the criteria required for traditional IRAs. It’s difficult to determine whether or not you can hold them within an IRA account without violating the IRS rules against prohibited transactions. 

Takeaway

It isn’t recommended to hold NFTs in your self-directed individual retirement account because the risk of having NFTs in your SDIRA is the same as holding any unallowed collectable. When you put your NFTs in an IRA, the IRS considers the value of that item to be distributed to you in the tax year that you made the investment. Therefore, instead of holding an NFT in your SDIRA, you should consider buying it with your separate funds. 

Much Thanks to Akanksha Malik for sharing her knowledge of investing in NFTs with Leisure Freak readers. A subject that I’m sure many have had little exposure to, including myself. Knowledge is always important and keeping up with the latest investment developments in this world is a big part of that.

Investing in NFTsAuthor Bio:

Akanksha Malik is a content creator & digital strategist at Mesha – India’s largest investing club & online community where the world’s best investors gather to share ideas, discover fellow investors, invest in NFTs & crypto, and compete in challenges for real money. She develops content to share her knowledge and insights helping her readers stay updated with the latest in fintech & investments, as well as cryptocurrency trends and upcoming NFT opportunities. Apart from being passionate about her work, Akanksha loves exploring architectural sites and different local dishes during her travels.

Disclaimer- Leisure Freak is in no way advising readers to invest in cryptocurrencies. Invest at your own risk. Crypto is a high risk investment scheme. This article is for information purposes only. 

7 Tips to Help You Achieve Early Retirement

Retire Early, Retirement Plan,

 

This article was contributed to Leisure Freak by freelance writer Tracie Johnson. is it still possible in today’s world to achieve early retirement? Knowledge and planning are key. These tips can get the ball rolling.

Planning for retirement is tricky, especially when you want to stop working years before you need to. But with a little bit of strategy and discipline, it is possible to retire years before your expected retirement age. Check below some guidelines to successfully retire early.

7 Tips to Help You Achieve Early RetirementImage Source: Pexels

1. Pick a Retirement Plan

The first step to planning for early retirement is to decide what you want in your life. It may be hard to make decisions when all your resources are concentrated on paying off debts and building up savings.

To hop into retirement early, pick out a suitable retirement plan. This plan will depend on your situation, and it will help you start growing your savings as soon as possible to facilitate an early exit.

 

2. Automate Your Savings

Automating your savings can help you achieve early retirement goals faster. If you can have automatic monthly transfers to your savings, it will become like another bill you pay without thinking. Additionally, as you prepare for early retirement, you can sell some of the assets you do not need anymore or will not use after retirement.

 

You can check the value of these assets to see how much they can add to your savings so that you can retire soon. For instance, if you have a car and a truck, you may only need the truck after you have retired from your projects in the countryside. Hence you can use an automotive valuation tool to find out the worth of your car to sell it immediately after retirement.

 

3. Hire a Financial Advisor

Early retirement means less saving time but more spending time in retirement. Therefore, you need to hire a financial advisor who will help you devise the best plan to save and invest your money. An established financial advisor enables you to develop an effective investment strategy to aid you in achieving your retirement goals and manage your income and investment once you retire.

 

Create numerous passive income streams. The financial advisor should be someone you are comfortable with since it will be a decades contract. An advisor must know where the money you sweated for is coming from and going.

 

4. Create Multiple Passive income Streams

The retirement period is the perfect time to pursue your passion, especially when you retire early. Working on a passion is flexible since you can work on it while on vacation, at night, or in your spare time. Create numerous passive income streams.

 

You can invest in dividends, the stock exchange market, and real estate that will turn into liquid assets after some period. Such passive income sources will cover your monthly burn and grow your net worth. This will ensure you attain an early retirement.

 

5. Crunch the Current Budget

When you start planning for early retirement, spend more time researching investment strategies than planning your actual budget. Apply a minimalistic approach by focusing on what you value and need and cease consuming and maintaining stuff you do not utilize or need.

Create a sound budget to understand where your money is spent and which expenses you can cut back. The more you spend impulsively, the more you save, and it determines how soon you can quit your job.

 

6. Have a Reliable Back-up Plan

It is essential to have a reliable backup plan since any plan is good until a crisis arrives. Consider a possibility of a problem, for example, a natural calamity or an economy tank. Run through potential worst-case scenarios and include a plan B. You can develop a backup plan with the help of your financial advisor since they understand the world of finance and the economy best.

 

7. Pay Off and Avoid Debts

If you have debts, a mortgage, or anything else, you need to pay these off before retiring. It is terrible to be an early retiree with debt because it will take much of your time and energy to clear the debt and pay off your creditors.

 

The long-term loan you take can jeopardize assets you could utilize for retirement devotions. Moreover, you may use a more significant part of your savings to pay debts hindering your planned investments.

 

Conclusion

Early retirement is all about planning and being disciplined. You can achieve your early retirement as long as you carefully plan and think ahead of the game. Integrate these tips into your plan to realize your dreams of exiting early.

Thank you Tracie Johnson for sharing these tips to achieve early retirement in a time when many people are exploring ways of taking a different path in life.

Best Financial Advice for Recent College GradsAuthor bio:

Tracie Johnson is a New Jersey native and an alum of Penn State University. Tracie is passionate about writing, reading, and living a healthy lifestyle. She feels happiest when around a campfire surrounded by friends, family, and her Dachshund named Rufus. 

 

Life Realities: 7 Beginner Saving Tips for Retirement

Retirement Plan, Saving Money,

This informative post providing several beginner saving tips for retirement was contributed to Leisure Freak by writer Roni Davis. 

If we didn’t have many financial responsibilities on our shoulders, we would start saving every penny we could right from our first paycheck. However, having the discipline to put your finances in check in your younger years is not always possible. When they are just striking out on their own, many people are unaware and just trying to find their place in this fast-changing world. 

It is natural to want to be better and find greener pastures – so don’t panic! Even if you’re already in your golden years and searching for a good retirement community to spend the rest of your days, you can still kick off your plan to improve your finances for the better before that time comes. Let’s discuss how to do it:

Life Realities: 7 Beginner Saving Tips for Retirement

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1 – Know Your Benefits

No one is a master at everything. Before settling on a plan, speak to your employer to see what, if any, benefits you receive. Some employers don’t have pension plans for their employees. Knowing this beforehand will help you understand the benefits you will get and if you need to change workplaces to better companies that look into their employees’ future. You might also be the key to your company considering making plans towards this if it doesn’t have plans for this. 

2 – Set Goals

Besides speaking with your employer, you should also talk to a financial advisor who can help you set goals to make your money work for you. As soon as you get all the information you need, devise a realistic plan to start saving your money. The most significant parts of this plan are how to start, where to save, your saving rate, investment ideas to boost your savings, and the deposit days. Make a solid plan to follow through and build up the required discipline. 

3 – Review Your Investments

There are two groups here; those who already have investments and those who don’t. If you already have investments in place, this is the time to re-evaluate them and see if they’re making the returns you had aspired to. If they’re bringing in more losses than profits, then it’s time to re-strategize and choose to either drop them or find ways to make them work. 

The investments could be right at times, but they could not be working because you don’t give them much-deserved time. Balance it all out and decide if you need to keep them or drop them. Alternatively, have you considered passive income? These will save you time. Weigh your options and conclude. 

If you haven’t started an investment plan yet, consult your financial advisor to guide you through it, preferably long-term ideas that will linger on even after retirement. These will undoubtedly boost your savings by a substantial margin.

4 – Automate Your Savings

If you look closely, this has been a lifesaver for many. Most people do this by setting a fixed amount of money taken off their paycheck before receiving it. Many people out there have a hard time saving their money, but with such systems in place, it makes it easier for them. Automating your savings saves your time and helps you plan accordingly for the remaining balance without wasting it. 

5 – Make Adjustments to Your Lifestyle

We all agree that unnecessary habits end up draining our bank accounts for nothing. It could be your drinking habits, traveling, buying expensive clothes, name them! It’s not easy to cut down on some of these, especially if they’re peer-influenced or if they have been part of your lifestyle for a long time. 

There’s always a starting point, and these are some of the challenging adjustments you will have to make. You can take the extra cash into an emergency fund to save you during the rainy days and to clear your debts, if any. This is not to say that you can’t spoil yourself once in a while, but this time around, do it with a plan. 

6 – Add To Your Working Hours

While you’re still energetic enough, it’s not a bad idea to put in the work to boost your income. Get that extra job if you need to, or consider extending your working time beyond the recommended retirement age, even if it means getting a part-time job. With this, you’ll comfortably meet your expenses as you save up. 

7 – Delay Your Social Security Benefits

In the financial world, you use all the tactics available to keep your finances aligned as long as you do it the legal way. A common mistake made by many is taking their social security too early. Delaying your retirement could make a significant difference to your more income and boost your survivor benefits for your beneficiary. 

 

Start making plans for your retirement life as early as now to avoid regrets. If you make your plans early, you will look forward to your retirement life without fear. Don’t also forget to be alert on the changing market trends to readjust accordingly to secure your retirement fund safely. 

Thanks Roni for contributing this article to Leisure Freak detailing some beginner saving tips for retirement.  The sooner we start, the sooner we develop the personal finance discipline and habits while leveraging time to build a better future for ourselves. 
V Baxter is now Roni Davis-Leisure Freak Contributed PostAbout the Author

Roni Davis is a writer, blogger, and legal assistant operating out of the greater Philadelphia area.

How to Conveniently Manage Your Private Investments

Investment Strategy, ,

 

This article was contributed to Leisure Freak by writer Samantha Higgins.

It’s not easy managing your private investments, but it doesn’t have to be a pain. There are many ways you can make the process easier and more convenient for yourself. This article will talk about how you can easily manage your private investments by looking at different tools to manage investments.

How to Conveniently Manage Your Private Investments

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How To Manage Your Private Investments

One way to manage your private investments is by using software applications. There are many different software applications that you can use to manage your private investments, such as SPV administration services, and each one comes with its own set of features. Some of the most popular software applications include Personal Capital, Quicken, and Mint.com.

Personal Capital

Personal Capital is a software application that you can manage all your private investments from one location. It also comes with features that allow you to see how much money you have spent on things like groceries or clothes. You can quickly and easily check up on your spending habits without having to go through individual bank accounts. It’s easy to sign up for Personal Capital, but you have to link it to your bank accounts. Once all of your accounts are linked, you can see how much money you’ve spent on groceries or clothes just by clicking through different categories.

Another thing that makes Personal Capital an excellent tool for managing your private investments is that it uses technology to help you make better investment decisions. The software application has a built-in financial advisor that will help you make more informed investment choices.

Quicken

Quicken is another popular software application that you can use to manage your private investments. Quicken comes with many of the same features as Personal Capital, but it also offers unique features that make it stand out. One of the best features is the investment alerts. With investment alerts, users can set up notifications for particular investments, so they know when a change has been made. Quicken also offers a built-in retirement planner that will help you create a custom plan to get you on track to reach your retirement goals. The software application also connects directly with over 14,000 banks, so you can easily track your finances.

Mint.com

Mint.com is a software application that you can use to manage all of your financial accounts in one place. Mint.com comes with many different features, but the most popular one is the budgeting feature. With the budgeting feature, users can create a custom budget and track their spending. The software application also comes with a debt reduction feature that will help you pay off your debts faster. Mint.com is free to use, and it connects directly with your bank accounts and credit cards so you can get a complete picture of your finances.

Financial Advisor

Another way to manage your private investments is by using a financial advisor. Financial advisors can help you better manage your private investments by providing investment advice. A financial advisor will work with you to set up a portfolio that is best suited for your current financial situation. You can either go with an in-person financial advisor, or you can choose to work with one online. An online financial advisor can be more convenient because you don’t have to meet in person, and you can usually get started for free.

Brokerage Account

The final way to manage your private investments is by using a brokerage account. A brokerage account is an account that you open with a financial institution that allows you to buy and sell stocks, bonds, and other types of investments. When you open a brokerage account, you can choose to use an online broker, or you can go with a full-service broker.

Full-service brokers are financial experts that will monitor your investments and make changes as necessary, but they generally charge higher fees than online brokers do for the same services. Online brokers offer many of the same features as full-service brokers because they allow you to buy and sell investments online, but they don’t offer as much personalization or hand-holding.

 

No matter how you choose to manage your private investments, it’s important to make sure that you have a plan in place. Having a plan will help you stay organized and make better investment choices. Failing to plan is planning to fail.

Much thanks to Samantha Higgins for contributing this article to Leisure Freak,  sharing convenient ways to manage your private investments. 

SamanthaHiggins How Manage Your Private InvestmentsAuthor Bio: Samantha Higgins is a professional writer with a passion for research, observation, and innovation. She is nurturing a growing family of twin boys in Portland, Oregon with her husband. She loves kayaking and reading creative non-fiction.   

Recession Lessons Learned Hold Up During Pandemic Market Drop

Bucket Strategy, Investment Strategy, Retire Early,

I was still in my first long career and just months away from my FIRE date in 2008 when it became obvious it was all going to hell. I learned valuable personal finance lessons regarding once in a lifetime economic dumps when everything is unprecedented with no signs of stability in sight. But back then I was still employed and had options. Retiring early and living off of a portfolio presents different challenges when that “just enough” portfolio can be severely stressed. I took the recession lessons learned and applied them to my early retirement portfolio strategy. Here’s a quick rundown on how it has held up during this pandemic crisis and its related market drop.

Recession Lessons Learned Hold Up During Pandemic Market Drop

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Year To Date Numbers Look Rotten

Pulling some numbers for use as an example from the first of the year (1/2/20) to (3/19/20) before the market stimulus bump shows substantial investment market damage.

  • DJI, Dow Jones: -33.6% 
  • GSP, S&P 500: -29.2%
  • IXIC, Nasdaq: -24.3%
  • VTSMX, Vanguard Total Market Index Fund: -30.0%
  • Leisure Freak Tommy’s retirement portfolio: -17.4%

Fortunately the stimulus market bump occurred and the end of quarter numbers did improve from the week before but still the worst quarter since 1987. 

  • DJI, Dow Jones: -23.2% 
  • GSP, S&P 500: -20.0%
  • IXIC, Nasdaq: -14.2%
  • VTSMX, Vanguard Total Market Index Fund: -20.3%
  • VTI, Vanguard Total Market Index Fund -22.4%
  • VTSMX, Vanguard Total Stock Market Index Fund -20.3%
  • Leisure Freak Tommy’s retirement portfolio: -12.2%

2008 Recession Lessons Learned – Portfolio Diversification Matters 

My being somewhere between leanFIRE and FIRE had me a bit more conservative to reduce risk. I used the recession lessons learned to attempt lowering financial pain from another extended market dump during my early retirement. Although I have no problem working in retirement when I want to, I never want to NEED to work for survival. I’m sure that post pandemic there will also be plenty of new lessons learned from this crisis to carry forward. 

I know plenty of people who are all in with stocks, mostly through Index and ETF funds. I would watch the market go gangbusters of late and think, what if I had only been all in stocks or stock funds too? One of the recession lessons learned was that diversified portfolios recovered much quicker than those all in stocks. 

Great Recession Diversified Portfolio Recovery Details

Stocks/Bonds Maximum Loss Time to Breakeven
20/80 9% 22 months
40/60 23% 25 months
60/40 35% 37 months
80/20 46% 42 months
100% Stock 55% 59 months

Another 2008 recession lesson learned was that sometimes bonds will track with stocks instead of going the opposite direction as in past history. That may be the case this time too. Diversification can lessen portfolio decline but not stop it. As listed above, my portfolio is down 12.2% for the first quarter of 2020 with this COVID-19 pandemic. But that’s much less than the sampled stock indexes.

The numbers look bad and may get much worse. 

If I was fatFIRE I might be able to stomach large losses and continue on. I wondered if being all in stocks over the past few years meant the excessive gains they have enjoyed are far greater than what has trimmed thus far during this pandemic market dump. So I took a quick look at the numbers on 3/20/20 prior to the stimulus market bump when things were at their recent worst.

  • DOW closed 3/20/20 at 28,869. That takes it back to what it was 11/1/16
  • S&P 500 closed 3/20/20 at 3,258. That takes it back to what it was 1/1/17
  • Nasdaq closed 3/20/20 at 6,880. That takes it back to what it was 11/1/17
  • VTSMX Vanguard Total Market Index Fund closed 3/20/20 at $56.01. That takes it back to what it was 12/1/16

I used the Vanguard date of 12/1/16 because it went the farthest back and I looked at my portfolio amount. I haven’t added any money to my portfolio during this timeframe and on top of that it has been paying out to me monthly since then. Comparing my 12/1/16 portfolio amount to 3/20/20 it was down -16.4%, which was 1% better than it was when looking at the first of the year to 3/20/20. That’s even after paying out to fund my and my wife’s early retirement lifestyle since that time. There were also associated CFP wrap fees on 90% of the portfolio since then. So unless I am missing something, being all in stocks appears to be a lot riskier when a major market dump occurs. That would account for a longer post recession portfolio recovery time frame.  

My FIRE Portfolio Allocation

I do keep a diversified allocation of stocks and bond funds like many people do. But I do something else. I use a bucket strategy where I keep two years expenses in cash and short-term bonds along with another year in a savings account. It was 2 years ago (3/2018) when I set this asset allocation.

  • 18.5% Cash/Cash Investments
  • 29.5% Bonds Fixed Income
  • 48% Equities
  • 4% Alternatives

I did not see the astronomical portfolio growth over the past couple of years that I would have with a larger stock allocation. But I also didn’t experience the higher level of losses now. I hope things come back to some version of normal sooner rather than later. With all the unknowns I now really appreciate having the cash as my FIRE portfolio survival insurance. It’s calming to know it’s there to  support our retirement lifestyle without resorting to depressed priced asset sales for a couple of years. 

If post pandemic recovery goes like that of the great recession then I hope to see similar favorable recession portfolio recovery timeframes for a portfolio with a diversified stock/bond/cash allocation. A leanFIRE to FIRE early retirement means I don’t have a lot to cut from our lifestyle to reduce spending during a sustained market dump. That’s why I took the 2008 recession lessons learned to heart to help ensure my early retirement portfolio survival during once in a lifetime or never before seen world and market events. 

I’m not trying to tell anyone what they should have done before the pandemic hit. 

If I could go back in time I would have gone to all cash last month. But that’s not how things work. I have no idea how the recession lessons learned or my portfolio will hold up with the next market close or even my own personal survival. I am only sharing this to support FIRE as a worthy goal. When some are saying this pandemic market dump means the end of FIRE or the end of early retirement, I feel it’s times like this that reinforces the need for the good personal finance habits of FIRE. I believe that FIRE is still a worthy goal. These are the times that really test our financial strategies and offer lessons to use going forward. 

 

Update 4/30/20: Anyone who experiences job loss due to the pandemic can check a new estimated stimulus unemployment benefit calculator. Zippia analyzed each state’s unemployment policies to determine how much unemployed workers can expect to receive under the coronavirus stimulus by state and salary. Remember, in addition to state level benefits, unemployed workers now receive an additional $600 a week for the next 4 months regardless of income. (The calculator is not a paid or sponsored link)

How I’ve Managed Income During Early Retirement

Bucket Strategy, Funding Retirement, Retirement Plan,

One of the challenges to early retirement is figuring out how to develop a reliable long-term income strategy. After decades of clocking-in and receiving regular paychecks for our efforts, retirement brings a totally different way of living both mentally and financially. This was something I worried about before retiring. As I approach my 10 year FIRE anniversary I thought I would share how I’ve managed income during early retirement. I’ve found that it isn’t rocket science even without having a million dollar plus retirement portfolio. It takes having the discipline to stick to an informed and verified plan. A plan that is monitored during retirement and allows for flexibility to adjust as required when conditions or projections change.

How I’ve Managed Income During Early Retirement

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The Way I Managed Income During Early Retirement 

Basic principle: Income during retirement must be greater than or equal to (>) lifestyle budget

There was no extreme early retirement strategy. We chose smart frugal living to save money and lived our retirement lifestyle for many years before we retired. We understood what and how we liked to live. A big part of our strategy was developing a split budget based on our different incomes. We then saved enough to support our individual budgets in retirement. This gave us a solid understanding of what it cost to both sustain and enjoy our chosen lifestyle. With that in mind we based our early retirement funding needs on that budget. 

Early retirement income sources: Where our income comes from now and later

When we retired almost all of our retirement savings were in 401K, IRA, and Roth IRA accounts. We then rolled our 401K account funds into IRAs. In my case I was age 51 and my wife retired a few years later at the age of 58. We also had some cash in savings accounts. Our income during early retirement would come from our IRAs and the cash savings. Later we will have Social Security to also provide retirement income and lower our savings withdrawal rate. 

Withdrawal plan: Establishing a sustainable withdrawal rate

We knew what we needed to receive in income during early retirement since our budget was well known. Instead of settling on the often touted 4% withdrawal rate plus inflation each year we used our required budget amount. Then calculating its probable sustainability in retirement calculators (FIREcalc) using our portfolio amount and estimated future earned Social Security income.

My initial withdrawal rate was about 4.6% and my wife’s initially 6% of her holdings. Hers would only be that higher rate for 4 years. Then her withdrawal rate will drop to 3% once her social security payments begin. My withdrawal rate has dropped over the years. It will also decrease to an estimated 2% range once we’re eligible for Medicare and when I begin Social Security at full retirement age. This along with historical investment cycles was considered in the calculation when using the retirement calculator resulting in 100% success. Basically we accept having a higher withdrawal rate early in retirement for a short period of time with lower withdrawal rates later once our earned Social Security and Medicare is available.      

Retire early and often: Where any earned money during retirement goes

I had always considered pursuing opportunities of interest and passions in early retirement. My retirement lifestyle was funded by my IRA so anything earned was extra money. Any earnings from my retirement gigs and a short encore career were saved in new 401K accounts, used to pay off our small mortgage, and put into a savings account as cash. 

Portfolio income distribution: It’s a bucket thing

We use a portfolio bucket strategy to provide income during early retirement. Within our retirement funding IRA is a cash bucket that we receive our monthly direct deposit distributions from. As with our budget, we keep separate bank/credit union checking and savings accounts where our individual IRA monthly distribution goes.

Our portfolio is diversified with various stock and bond funds. All interest and dividends are directed to the cash buckets. Selected assets are occasionally sold to maintain our desired cash bucket amount. When I was working through my bucket list of paying opportunities my portfolio’s cash bucket was 6 to 8 months of my income distributions. Now that I have worked through my list and I’m no longer actively pursuing paid adventures my IRA cash bucket strategy is to have closer to 2 years cash, as is my wife’s.

Unspent monthly distributed money that we receive is saved in our bank savings accounts to be used as needed when monthly expenses exceed our distribution amount. Such as in months when annual property taxes or bi-annual auto insurance are due and our travel months. I also keep nearly 2 years cash in savings and CDs. If/when I take on a new paid adventure then cash/bucket adjustments can be made. 

Getting income during early retirement without penalty: Pre age 59 ½ access to retirement accounts  

Most of my savings was in tax deferred retirement accounts. My early retirement strategy relied on the SEPP 72t (Substantially Equal Periodic Payment) rule to get penalty free distributions before age 59 ½. I took a chunk of my portfolio to set up an IRA and locked into a SEPP 72t at the age of 51. It provided a fixed monthly distribution until I reached the age of 59 ½. I used these distributions to fund early retirement and paid income taxes based on my income tax rate for the year.

When I worked in paying opportunities I routed those employment earnings back into savings and mortgage elimination. My wife stayed working until age 58 to reach her 20 year service anniversary which gave her some retirement benefits. She saved 2 years of retirement funding in her savings account and didn’t need to begin IRA withdrawals until age 60 when the early withdrawal penalty would no longer apply.

Managing Taxes: Starving the Tax Monster

I purposely try to under-withhold taxes within the underpayment thresholds to avoid penalty. I never want to get a tax refund. Even though a savings account pays little interest it is still better than an interest free loan to the government. Not to mention delayed refund potential due to all the tax filing fraud that seems prevalent. When I work in paid opportunities it does raise my tax rate. I would set my W4 to withhold taxes at the single rate with 0 allowances to withhold the maximum. My portfolio distributions has a tax withholding of 10%. Even with that, when I worked in retirement I still owed money at tax filing time.

Without paid work our real tax owed is 5% to 6% of total retirement income. Our IRA financial planner’s system only supports 10% + withholding for federal taxes. So I suspend tax withholding on our IRA distributions from January through June and then have them apply the 10% withholding rate until year end. This works out where we owe a very small amount at tax filing time. We have no State tax withheld from our retirement income but fortunately our low taxable income means only paying at most a couple of hundred dollars a year. 

Social Security Income: We earned Social Security by paying into it and plan on getting it

Social Security seemed so far off when I first retired almost a decade ago. Now it is knocking on our door. Aside from all the strategies to maximize Social Security, when to apply and receive benefits is a very personal thing. We have run the numbers through every scenario on retirement and Social Security calculators. Based on our lifetime income differences and thus the resulting benefit amounts between my wife and I, our plan is she begins her benefit at age 62 and I wait until Full Retirement Age (FRA) 66.7. That time is still years away and I can decide then whether to wait until age 70. It will all depend on whether we need it due to market and portfolio conditions or any changes to Social Security that may come. 

 

That’s it in a nutshell. As you can see there’s nothing complicated. 

Does Your Credit Score Matter After You Retire?

Managing Debt, Retirement Plan, Saving Money, ,

Retirees, and especially individuals looking to retire early, may wonder if their credit score matters after they retire. The short answer is that it does. You may still need to borrow in retirement, and your credit report significantly affects your ability to do that. 

Individuals with good credit scores get more favorable interest rates on loans. They are also more likely to be approved for loans, to begin with. Higher credit limits are allotted to people with good credit, allowing you to enjoy more of your golden years. 

While your relationship with money may change dramatically upon retirement, it will still be a necessary part of your life. The following are some things your credit score will affect even in retirement. 

Does Your Credit Score Matter After You Retire?

Photo by Elena Saharova on Unsplash

Buying A New Car

Your credit will be checked when purchasing a new vehicle. Many people buy new vehicles after retiring for either travel purposes or to downsize. You may even decide to sell your home entirely and purchase an RV home in which to travel. 

Fortunately, you are unlikely to be denied a car loan even if your credit isn’t stellar. This is because vehicles are easier for banks to repossess should you default on the loan. However, a vehicle will cost substantially more due to higher interest rates if your credit is bad. 

Buying Property

You may still purchase property in retirement, even if you aren’t planning to. For example, you may downsize from your existing home into a condo. Health issues may necessitate moving into an assisted living facility. A better credit score will make it easier and cheaper for you to buy a property of any kind. 

Even if you plan to rent, landlords check credit as well to evaluate the risk of taking you on as a tenant. In fact, your income and credit history are two of the biggest factors landlords evaluate when reviewing your application. Be sure to budget appropriately for your living costs in retirement. 

Refinancing A Mortgage

If you are still paying a mortgage in retirement, it may be a smart idea to refinance your house. Doing so can help you save significant amounts of money on your monthly mortgage payments. However, to get a good deal on refinancing, your credit score has to be good. 

Remember that borrowing against your home equity can affect your credit score. Go in with the best credit score possible and a solid understanding of how a refinance can affect your credit. Your lender can even cancel your refinance loan if your credit score falls below a certain level. 

Keeping Low Insurance Rates

Certain states do not allow credit rating to affect insurance rates, including California, Hawaii, and Massachusetts. If you live anywhere else, insurers can take your credit rating into account when determining your rates. The lower your rating, the higher your rates will be. 

You cannot afford to live without certain types of insurance. In particular, the costs of not carrying adequate homeowners insurance are too high to be worth the risk. Car insurance is legally mandatory. You may also need to carry insurance on items such as boats or RVs. 

Facilitating Better Travel

The freedom to travel is one of the biggest perks of retirement, especially retiring early. Some credit cards give you incredible rewards you can use to travel for cheap or free. However, these cards all require a very good credit score to be approved for them. 

It can also be difficult to travel without a decent credit limit. Doing so can take away money from other necessary expenses. This can create a cash flow problem that could be a real issue under the right circumstances. Never charge more than you can comfortably repay. 

Avoiding Identity Theft

If you haven’t checked your credit score much in retirement, you may be at higher risk for undiscovered identity theft. Identity theft is particularly high among seniors because there are many scams targeted to that demographic. Knowing the status of your credit and being in control of it is key to detecting identity theft immediately. 

Credit cards also offer protection against fraudulent purchases that other forms of payment do not. Aside from guarding against identity theft, credit cards can also come with added warranties for items you purchase. 

Starting A New Business

Upon retirement, you may decide that you don’t want to actually stop working. Retirement can be an excellent opportunity for pursuing a lifelong dream, hobby or passion. To do this, you may be considering starting a small business. 

Many businesses will require loans to set up. Like other loans, you will be charged a higher interest rate the worse your credit score is. This added expense will be a burden on your business from the beginning and make it more difficult to remain in business. It will also be much more difficult to get a business loan at all if your credit worthiness is poor. 

Existing Debt

If you have outstanding debt upon retirement, you will want to maintain a good credit score to keep interest rates low. Credit card issuers regularly change the interest rates of cardholders depending on how their creditworthiness changes. 

Interest can accumulate quickly and put you in a bad financial situation. This is especially true if your interest rates suddenly or gradually increase due to a decreased credit score. Do not let this happen. Continue to pay off debt and maintain a good credit score, and you will pay less in interest over time. 

Getting A New Job

You may not plan to get another job after you’ve retired, but plans can change. Perhaps you decide you need something to do or could use the extra income from a part-time job. Neither of these situations is uncommon among retirees, and you should be prepared for the possibilities. 

If you do get another job at any point, your credit score will be something your potential employer views. While it certainly isn’t the only factor in determining whether to hire someone, it can be a red flag for an employer if you fail a credit check. A hiring manager is going to view someone with strong credit as a more reliable candidate. 

Supporting Family Members Financially

You may be financially well-off, but your family members, especially your children and grandchildren, may not yet be. This often results in parents giving their children a little financial help every once in a while. Unfortunately, doing so can become more difficult and costly if you have bad credit. 

Being able to cosign for children who need help to get loans of their own is a major way parents help their kids. Doing so can help ensure your children get loans and at favorable rates. You can be a cosigner on things such as leases, car loans and more. However, you need to have good credit to be a cosigner. 

Preparing For Healthcare Costs

As you get older, you will often run into increased medical costs. Even if you have saved for retirement responsibly, medical expenses incurred due to age-related conditions can add up quickly. 

A high line of credit, which you can only get when you have and maintain good credit, will help you pay for these medical expenses. Hospitals are also more likely to agree to a favorable payment plan if your credit history is good. 

Preparing For Emergencies

A good credit score will give you a higher line of credit to cover the costs of any emergencies when they occur. You need to be prepared to financially cover emergencies no matter your age. Unexpected expenses are sure to occur at some point during your retirement. 

Emergencies where having good credit and a higher credit limit can pay off include car repairs, home repairs, medical bills, and other possible necessities. You may need to borrow to cover these costs, and the loans will cost less if your interest rates are lower due to good credit. 

Other Places That Check Credit

Other places check your credit you were probably not even aware of. For example, cell phone companies will give better deals to individuals with good credit. Utility companies will also do a credit check when you set up services with them. 



Your credit undeniably plays a major role in your life at any age. It is one of the best tools you have to prove your financial reliability in a wide variety of circumstances. Maintain good credit so it won’t affect unforeseen areas of your life. 

Retiring is ultimately no reason to stop monitoring your credit score. Check it regularly to ensure your score is good and that there are no issues such as fraud occurring. Maintain good credit by paying bills on time, keeping a budget and using your credit responsibly. 

Do you have a question or anything else to add? Be sure to leave a comment.

Thank you John Blakely for this informative article contribution to Leisure Freak

About the Author:

John Blakely has had a passion for all things personal finance for over a decade. He is a firm believer in having big financial dreams and executing on a plan to realize them. He is an Education Ambassador for ScoreSense where you can find more of his writings.

Retirement 2019 Tax Planning: It’s A Good Time To Start Bean Counting

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I’m always trying to use both my non-taxable accounts and taxable IRA income to keep my tax rate as low as possible. It amuses me when people will get a rise out of a killer 8% gain on an investment but give little thought about the retirement taxes they pay. The new tax brackets are from 10% to 37%, so saving on taxes for retirement distributions is a big deal too. But before you can do any retirement 2019 tax planning you have to know where you stand within the new tax laws. That’s the only way you can possibly structure your retirement income in a tax efficient way to stay below desired taxable income thresholds. Here are the recently released 2019 income tax details.

Retirement 2019 Tax Planning: It’s A Good Time To Start Bean Counting

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Retirement 2019 Tax Planning Details To Factor In

The big tax overhaul of questionable benefit to us regular folks went through last year and has a few tweaks for 2019. I’m looking forward in the coming months to seeing exactly what, if anything, the peanuts they tossed to low-income and middle class taxpayers works out for our 2018 tax filing once we put our final numbers to the 1040. No matter how the tax burdens and benefits shifted, we have to live with it and pay up. Knowing where we sit income-wise and looking at any options we may have to keep as much of it as we can is always a prudent retirement planning move. Once estimating our 2019 income and its taxable/non-taxable sources we can begin forming the basis for our retirement 2109 tax planning.

Deductions Were Moved Slightly Up

The taxes we end up paying are all about Taxable Income, therefore deductions are the logical starting point.

2019 Standard Deduction

Who can forget how they touted how their Tax Cuts and Jobs Act doubled our Standard Deduction but quietly said little about the elimination of personal exemptions which used to be $4,050 a piece. So much for a huge tax break. If you didn’t pay attention last year then may I be the first to say, SURPRISE! Your “Schedule A” goalpost was moved farther away. The Standard Deduction did adjust up a little from 2018.

Single Standard Deduction – 2018 it was $12,000. For 2019 it will be $12,200

Married Standard Deduction – 2018 it was $24,000. For 2019 it will be $24,400

Head of Household Deduction – 2018 it was $18,000. For 2019 it will be $18,350

2019 Retirement Contributions

For anyone still picking up a paycheck the amount that can be set aside tax deferred for retirement has also increased slightly for 2019.

401K – For 2018 it was $18,500. For 2019 it will be $19,000. Age 50 or older can add another $6,000 to that.

IRA – 2018 it was $5,500. For 2019 it will be $6,000. The age 50 or older catch-up contribution stays at $1,000.

Schedule A Deductions

Last year’s filing of 2017 will most likely be the last year I will ever be able to file with a Schedule A to save money. Increasing the Standard Deduction at the demise of Personal Exemptions only made filing long-form with Schedule A harder to benefit from. Add to that the other sweetie highlights of Tax Reform and depending on your state property tax and income tax rate, there will be some federal income tax filing pain ahead.

The new Mortgage Interest rules and caps from 2018 remain. Homes bought after 1/1/18 caps deductible interest at a $750,000 loan value. Equity loan interest remains non-deductible with no exceptions.

State and Local taxes are still capped at $10,000.

Medical Deduction is 10% of AGI (Adjusted Gross Income).

2019 Individual Income Tax Brackets

This is where the rubber meets the road. Retirement tax planning means trying to fall within the lowest tax brackets possible.

2019 Individual Income Tax Rates Single-Taxable Income Married Filing Jointly – Taxable Income Head of Household – Taxable Income Married Filing Separate – Taxable Income
10 percent 0 – $9,700

Pay 10% of taxable income

 0 – $19,400

Pay 10% of taxable income

 0 – $13,850

Pay 10% of taxable income

 0 – $9,700

Pay 10% of taxable income
12 percent $9,701 to $39,475

Pay $970 plus 12% of the amount above $ 9,700

 $19,401 to $78,950

Pay $1,940 plus 12% of the amount above $19,400

 $13,851 to $52,850

Pay $1,385 plus 12% of the amount above $13,8500

 $9,701 to $39,475

Pay $970 plus 12% of the amount above $ 9,700
22 percent $39,476 to $84,200

Pay $4,543 plus 22% of the amount above $39,475

 $78,951 to $168,400

Pay $9,086 plus 22% of the amount above $78,950

 $52,851 to $84,200

Pay $6,065 plus 22% of the amount above $52,850

 $39,476 to $84,200

Pay $4,543 plus 22% of the amount above $39,475
24 percent $84,201 to $160,725

Pay $14,383 plus 24% of the amount above $84,200

 $168,401 to $321,450

Pay $28,765 plus 24% of the amount above $168,400

 $84,201 to $160,700

Pay $12,962 plus 24% of the amount above $84,200

 $84,201 to $160,725

Pay $14,383 plus 24% of the amount above $84,200
32 percent $160,726 to $204,100

Pay $32,749 plus 32% of the amount above $160,725

 $321,451 to $408,200

Pay $65,497 plus 32% of the amount above $321,450

 $160,701 to $204,100

Pay $31,322 plus 32% of the amount above $160,700

 $160,726 to $204,100

Pay $32,749 plus 32% of the amount above $160,725
35 percent $204,101 to $510,300

Pay $46,629 plus 35% of the amount above $204,100

 $408,201 to $612,350

Pay $93,257 plus 35% of the amount above $408,200

 $204,101 to $510,300

Pay $45,210 plus 35% of the amount above $204,100

 $204,101 to $306,175

Pay $46,629 plus 35% of the amount above $204,100
37 percent $510,301 and up

Pay $153,799 plus 37% of the amount above $510,300

 $612,351 and up

Pay $164,710 plus 37% of the amount above $612,350

 $510,301 and up

Pay $152,380 plus 37% of the amount above $510,300

 $306,176 and up

Pay $82,355 plus 37% of the amount above $306,175

The additional deduction for aged (65 and older) or the blind is $1,300. It is increased to $1,650 if also unmarried and not a surviving spouse.

2019 Brings One Less Tax Penalty

For those who dare live on the edge without medical insurance, the ACA non-insured penalty will no longer apply for tax filing year 2019. It was still in effect for the 2018 first year of Tax Reform.

 

The IRS notice for tax year 2019 is full of all kinds of tax details, much more than talked about here. Hopefully the short list provided above helps you get an idea of what to look at for your retirement 2019 tax planning.

Stop Waiting For Birthdays, There’s No Ideal Age To Retire

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When asked, when is the best time to retire, do you answer with an age somewhere from 61 to 65? If you do then you are part of a majority of Americans according to a Bankrate.com survey and you most likely answered WRONG. There is no ideal age to retire. The correct answer is when you can afford to retire. When I pose the question as the “best time” to retire and the first thing that comes to someone’s mind is an age, then I suspect there’s a lack of a real retirement plan or one of confidence to back up that “age” answer. It’s just a birthday based retirement hope plan.

Stop Waiting For Birthdays, There’s No Ideal Age To Retire

Photo by Gaelle Marcel on Unsplash

Why Age Comes To Mind, Even When There’s No Ideal Age To Retire

When conversation turns to retirement and I ask people when they plan to retire and they answer with “in “X” amount of years” it’s easy to believe they have an actual retirement plan of some kind. But most of the time I get the “age” answer somewhere between age 62 and 70. People get hung up on age based retirement goals with little thought as to exactly why. Some understand their finances enough to know the money details of why they answered with an age, but unfortunately many who haven’t thought about or haven’t done any kind of retirement planning replies with an age that just sounds like an ideal age to retire.

Dig deeper and it comes down to a psychological association to Social Security and Medicare eligibility along with a pinch of retirement tradition. Then it’s whipped up into hope, whether there is any financial basis to back it up or not.

When I tell these folks I retired at the age of 51 it gets their attention and starts their retirement wheels turning. There’s usually a puzzled look followed with- How? That’s when things get interesting. I get to explain that we do have some power to retire without solely relying on traditional retirement birthday milestones and just hoping for the best. It’s about reaching our ideal time to retire. That has less to do with our age and everything to do with our personal finances.

Forget About An Ideal Age To Retire, Decide To Set Your Ideal Time To Retire

Certainly there are a lot of people with a lifetime of low wages, inconsistent employment availability, or have experienced other financially catastrophic situations during their lives. They are unable to save or adjust their lifestyle enough to escape waiting until their Social Security age requirements to have any kind of retirement. But that isn’t about being your ideal age to retire. It’s still a matter of your ideal time to retire because of your financial situation. However, you won’t know that or have any idea what’s ahead if you don’t get your head in your own game.

When would you want to retire?

As time goes on, shifting our retirement milestone mindset away from age and instead toward our finances may give us a better chance to bring retirement more in alignment with when and how we want to retire. Too many default age based retirements find out at the last-minute that they still can’t afford to retire. Hitting the age to begin Social Security and Medicare isn’t a guaranteed fully funded retirement. There are things that everyone should do to shake themselves free from the ideal age to retire thinking and just hoping it works out.

Set Your Own Financial Retirement Goals

There are a lot of opinions about retirement out there. Take in the abundance of broad stroke financial advice as valuable guidance, not hard rules to conform to. Most of it borders on the minimum to be done. The system is designed to cover the masses without regard to individual initiative to break free from employment and consumer conformity. It’s geared toward traditional old-age retirements. Strive to beat it when you can.

Social Security and Medicare –

Social Security will play a major retirement role for most of us. There’s a lot of talk about delaying retirement until age 70 when we can get our maximum Social Security benefit. Others say to take Social Security as soon as we can. People can weigh the pros and cons of starting it early at age 62 through waiting until age 70. However, those are financial considerations about how it plays into our financial and even our retirement lifestyle goals. Something that even people who retired early, long before being Social Security and Medicare eligible, calculates into future retirement funding plans.

Separate the Social Security and Medicare age requirements from when you see as your ideal time to retire. Make a cognitive decision as to how much they will play in calculating your ideal retirement time.

Age is just part of our financial calculations, like when it’s best to start taking Social Security benefits to reduce reliance on our savings or lack thereof, vs. longevity calculations. There’s also the impact Medicare will have on the budget and future funding needs.

Take control of your future –

It’s done by shedding debt and creating a happy and sustainable budget-friendly lifestyle. Then purposely saving and investing for retirement. A retirement that gets to start once financial numbers are hit, not just hitting an age. Here’s what to do –

Figure out the lifestyle you want to live

Take stock of your current lifestyle and how you want to live in retirement. Figure out the “where and how” you see your ideal and financially backed life as being. Cut waste from your lifestyle and commit to a sustainable plan. Look at retirement like anything else in life. Not what age, but how much will it cost and when can I afford it.

We can set financial goals to be met by a certain age but it’s the financial numbers that we’re motivated to hit, not the birthday. The date is only relevant to measuring and tracking our progress against. See retirement as the biggest purchase of our lives and save for it because it’s a huge purchase that we can’t finance. We then get to dictate what we buy and when we buy it.

Track and validate finances, not the number of birthday candles

Once figuring out the lifestyle you want to live you get a better picture of what it will cost. Calculate how much money you need, then determine your ideal time to retire. Use a good monte carlo type retirement calculator and start playing with the numbers with different retirement dates. Pull your Social Security estimates and plug into the calculator different benefit start dates and their associated payment amounts.

Is your ideal time to retire before Medicare eligibility? Figure out how and where your retirement medical insurance will be handled and include its cost in your retirement calculations.

Diversify your investments within your risk tolerance and stick to your retirement savings plan. Plug into the calculator different stock-to-bond ratios to understand what impacts it has on your retirement funding success.

If the calculations show your retirement cost and affordability are out of whack, then time to rethink your desired retirement lifestyle. Change your plan. Just like when you can’t afford a Cadillac you instead decide to buy a Buick or Chevy to make it work and still get what you need and most of what you want.

After getting an idea of your retirement financial goals you should track your progress, success, and mistakes. Make adjustments with life’s ups and downs but always move forward toward your financial goals.

Birthdays come and go

Celebrate birthdays but don’t solely count on them to identify your ideal time to retire. Let your planned financial situation do that. Hopefully that happens early enough that there will be many birthdays to celebrate in retirement.

Seek information and get serious about retirement planning. The earlier we do this the easier it is to take control of our future. If you need or want help, seek professional assistance from a CFP. Hopefully if asked when you plan to retire you can say with confidence in “X” years and have the details to back up why and how. Remember that even if you try to better your finances and fall short, or your ideal time to retire still depends solely on your waiting for Social Security and/or Medicare, you are much farther ahead than if you had done nothing to take control of and better your personal finances.

Now let me ask you, when is the best time to retire?

How To Improve Your Financial Situation Today For A Better Future

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Money is something that not everyone is comfortable talking about. Either you’re doing well and you don’t overly want to go into your situation or seem like your boasting, or you’re not doing so well and you don’t want to have to think about it. Despite which option applies most to you, you may find that you just don’t want to have to think too much about money. But if you want to be able to let your finances really flourish, you just have to. You have to be okay with thinking about money, coming up with ideas, and planning what you’re going to do for a better financial future. There’s no way around it. Because if you are going to enjoy a healthy financial future, you have to start putting the wheels in motion today. And this is something that not everybody realizes.

So, you want to enjoy your retirement or have a more comfortable standard of living in ten years time? Well, that all starts today. Today is the day that you really need to be okay with making changes to your current circumstances, habits, and actions. When you can work on making improvements now, you will find that you really turn things around. Even if you’re not struggling and you have your sights set on being in an incredible situation. If you want that to happen, you need to get real about it all today. If you’re not sure where to start, let’s take a look at some steps that can help you to do it.

How To Improve Your Financial Situation Today For A Better FutureImage source

 

1- Be Real About Your Financial Situation

 

When you’re looking to make any kind of change in life, the first thing you need to do is access where you are. So think about your current situation. Whether it’s negative or positive, you need to understand what position you’re in now, so that you can work out what it will take for the better future you want. From living frugally to investing in yourself more, there are so many solutions to consider. But first, you have to really get to grips with where you are.

 

2-Deal With Debts

 

One thing you absolutely have to address is any debts that you have. If you are debt-free, then move on to point three. But if you do have debts, no matter how big or small they may be, you’ll want to work on paying them off as soon as possible. So speak to your providers and see if you can work out a repayment plan that is going to be as favorable to you as possible – no matter how long it takes.

 

3- Ensure You Have The Funding Available For Now

 

From here, you will want to make sure that you have all the funds you need to live today. This means that you will need to know that you can pay your bills and afford food for the time being. If you are in a short-term financial bind you can consider borrowing money. This is easily done if your credit is decent. But, you can get a small loan for bad credit too.  Just something to consider as help to cover a short-term gap. By working out a rough budget that you can stick to for now, you should be able to cut back on things that aren’t necessary, so that you are always living within your means going forward.

Improve Your Financial Situation Today For A Better FutureImage Source

 

4- Increase Your Income

 

Now, you need to work on increasing the money you earn. These ideas to drastically increase your income are always worth considering. Yes, this is going to take work. But if you want to improve your future, it will always be worth it.

 

5- Get A Side Hustle

 

Another option is to get yourself a lucrative side hustle, as seen in that post. Sometimes, you won’t always be able to earn the money that you want from your job. But doing something on the side will allow you to get the extra income you need.

 

6- Save Today To Benefit Tomorrow

 

Now, you may struggle to cut back today, because you think you need all of those things in your life to live comfortably. But if you really want to be able to enjoy your future, you will want to make sure that you’re living frugally today, so that you can enjoy more tomorrow. This may be something you need to do for a few months or a few years, but if you’re serious about your future, this will always pay off.

 

7- Start A Savings Plan

 

To help you do exactly that, you’re going to want to come up with a savings plan. Think about the amount of money you have free to pay towards your goals for the future (more on this in point ten). When you create a plan, you should find it much easier to start putting money away automatically, rather than seeing it as difficult to part with the cash.

 

8- Think About Your Retirement

 

Now, a huge part of your future will be retirement. You’re likely here because you want to retire early. But how early are you talking? Do you know what age you’d like to retire and how you’re going to do that? Maybe it’s time to sit down and really plan out what you need to do with your career to make this happen.

 

9- Watch Your Money More Closely

 

To really help you to make this work, you have to keep an incredibly close eye on your financials at all times. Check in with your accounts daily, assess your spending daily, and make judgments going forward to help you to keep things in line.

 

10- Set Financial Goals

 

Lastly, you should find that it really helps you if you can set yourself some financial goals. Now, they don’t have to be huge, but you should ensure that you have some kind of guide in your mind about what you want to do with your money. This could be to save a set amount of money to go on a vacation or it could be to commit to a certain payment each month to a 401k. As long as you have goals in place, you should find that you can really improve things for the future.