If you're looking to retire early, Stephanie AuWerter, Editor of SmartMoney.com, has some tips for getting there sooner.
One of the first things you can do to ensure an early retirement is start saving early. "A comfortable retirement is now resting firmly on our own shoulders," says AuWerter. "You shouldn't count on having a comfortable pension plan." The earlier you start saving, the more time your money has to accumulate interest. Make saving a priority - now.
One way to start is to enroll in your company's 401k plan. This year, employees can contribute up to $15,500. However, many people throw away free money by not participating in their company's matching program. "A lot of people are complaining they aren't getting raises, they aren't getting promotions, but at the same time, they're not contributing enough to get their full company match," says AuWerter. If your employer offers a matching program, make sure you meet all the requirements and sign up.
If you have other investments, be sure they are diversified. This goes for your 401k, too. "Particularly when you're young, that means you want to have part of your account invested in the stock market," says AuWerter. "If you aren't comfortable making those sorts of investment decisions, look for something called a target retirement mutual fund." These funds automatically adjust to become less risky as you near retirement, so it takes a lot of the guess work out of investing.
No one wants to retire with a mountain of debt. Do your best to pay down high interest debt - like credit cards - as soon as possible. Also, pay off your mortgage. "You're going to be on much stronger financial footing in retirement once you have that mortgage paid off," says AuWerter. But don't neglect your investments either, even if it means you put a smaller amount away every month. Remember - you're trying to build your nest egg, and every little bit counts.
For more information on retirement, as well as additional financial advice, click here to visit www.SmartMoney.com.
By Erin Petrun
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