A Simple Retirement Plan for You!

by Krantcents · 33 comments

Post image for A Simple Retirement Plan for You!

Retirement can happen at any time!  A typical definition of retirement is the act of leaving one’s job and ceasing work.  In my parent’s generation, you kicked back and did not do much. It was a way of withdrawing or retreating from the work world.  It may happen at a certain age or when you accumulate sufficient assets, money, investments or savings.

It is no secret that people are living longer!  So what?  Do you really want to retire when you are sixty-five (65) years old?  I didn’t!  I was in my early thirties and realized I wanted to make my own choices in life.  I didn’t start out trying to retire early and quit my job.  I never saw that role model nor was it something that looked attractive to me.  I grew up with entrepreneurial parents who constantly worked and never had time for me.  I went to work with them to just see them more.  I wanted to succeed in the corporate world!

Thanks to workaholic parents who worked 24/7, a corporate job seemed like almost semi-retirement compared to them.  I worked just 50-60 hours a week and still had a life outside of work.  I would get to work by 7 AM and leave between 5-6 PM.  I was important to have a family life and balance work and the rest of my life.  Why become an entrepreneur?  I started by just investing in income property and it fit me like a glove.  I liked it because it was all about the numbers.  The value of income property is based on the income it generates.

Steps to Freedom

Income property is not for everyone!  What can you do to retire early or at all?  First, start with your priorities.  You are twenty-two (22) years old and just graduated college or finished an apprenticeship.  Next, you need a job!  In this economy, it is not easy, but this is not new to recent graduates.  Good or bad economy, you should prepare for the day you will graduate.  You should have accumulated summer jobs, paid or unpaid internships and professional connections.  If you didn’t do that, finding work will be harder.  Even if you did, it is not a slam dunk!  If you have trouble finding work, think about unpaid internships that you can add to your resume.

You network and find your first job.  Great, your salary is probably $40-50,000.  For the next eight (8) years you need to max out your 401K and Roth IRA.  What would have to do to make that happen?  You may need one or more roommates or live with your parents.  Living like a student is not foreign to you and it is a small sacrifice to get to where you want to be in eight (8) years.  Remember your salary should increase every year and the sacrifice will decrease each year.  Without a match or any growth, you should have $132,000 in your 401K and $40,000 in your Roth IRA.

If you do not add any money to the 401K, you will have over a million dollars in thirty-five (35) years with a 7% return.  You can use your Roth savings as a down payment for a home or business.  You can start your business on the side during those first eight (8) years online or the traditional way.  You may finance it yourself or get financing.  It is up to you!  Maybe you start out thinking that you are not interested in starting a business.  There is a number of well paying professions such engineering, information technology or many of the trades which provide a comfortable living.  You may feel differently at a later date and you can use your experience to start a company or get a contractor’s license.

You need to plan for this future change.  How will you fund this change?  Will you finance this through savings?  It will be your choice after only eight (8) years!  Imagine never working for someone else at an early age.  More importantly, doing something you enjoy and building a business for yourself.  It is your choice because you made the effort to provide the opportunity.  Choice means you take it or not.  If you are happy in your career, you would just keep contributing to your retirement savings and keep working.  Just investing in the stock market or individuals is also a choice.  The result may be the same.

Retirement or financial freedom is different for everyone.  You do not have to quit your job and stop work.  There are many people who do things they enjoy working for someone else.  There are CEOs and other executives of public companies who earn multimillion dollar compensation packages.  It just doesn’t make sense for these executives to quit their jobs.  There are many people who enjoy their job and they would not be good candidate s either.  It is all a matter of choice!  A little planning provides choices.

Don’t Forget Your Career

I have always been an advocate of choices.  Much has been written about starting your own business.  Finding a career that works for you is no easy task!  I have always said that you need the skills and knowledge that will allow you to be your best.  If you like what you do, you will be good at it.  The money usually follows.  If it doesn’t, you can always change employers.  Do you want more responsibility?  Are you a leader?  You can find a role in a company that pays well and achieve success.  Remember, you can always start your own business.

Planning early with savings and for a career pays off big with choices!  Can you imagine having a lucrative career that you can easily walk away from, but choose to stay because you love it?  It is the kind of choice, we would all like!  If you are unhappy with your job or career, consider changing employers or your career.  Starting a business is a bigger commitment and should not be taken lightly.  Everyone thinks about all the great things about being in business, but you can win big or lose too.  The bottom line is to have a choice!

Final Thoughts

When you retire should always be a choice!  If you plan early and do what you need to do with savings, you can have choices.  Whether you decide to retire early, start a business or continue working, it should always be a choice.  Too many people reach middle age and realize they are unhappy in their career, but are stuck because they were unprepared.  A little planning and savings provide choices.  What are you going to do?  Retirement can happen at any time!

Photo by:  grantlairdjr


Yakezie Carnival at The Frugal Toad
Finance Carn. for Young Adults at Femme Frugality
Carnival of MoneyPros at Drop That Debt
Carnival of Retirement at Making Sense of Cents
Y and T’s Weekend Ramblings at Young and Thrifty.ca
Carn. of Financial Camaraderie at My University Money

Retirement can happen at any time!

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