Three Things You Can Do If You Don’t Have Retirement Savings
“Save early and save often” is one of the few financial advice that almost everyone agrees with . Starting early has tremendous benefits . But if you missed the chance to start saving money between the ages of 20 and 30, hope is not lost .
Get Rich Slowly explains how to get back on track if you’re 40 or over and just starting to save:
The good news is there are ways to go astray. The bad news is none of them are perfect or even simple. Thus, you must decide which one (or more) of the following imperfections overlays you will pursue for the best possible recovery:
- Invest three times more than someone who started 10 years earlier
- Accept a higher level of risk
- Get more involved in your investment activities
To catch up without making more risky investments, you will have to invest much more than someone younger. See how much you should have set aside by age in your retirement account .
If you are willing to take more risks, you can invest in more aggressive investments. Get Rich Slow gives an example of Detroit’s bonds for its fire department, but you can also invest more of your money in growth mutual funds. Yes, it is risky and there is no guarantee that it will pay off, but as Get Rich Slowly points out, when you don’t have $ 3,850 a month to invest, the question is not whether it’s worth risking your savings, but how much of the risk. You can take on a little more risk in exchange for the likelihood of higher returns.
The third strategy is to engage in more active investments, for example, renting a property. This is the second job, but “in 20 years, you can turn this investment into a self-replicating source of income with built-in inflation insurance.”
None of these options are pleasant, but at least there is hope – if you start saving now.
Starting to Save for Retirement at 40 | Get rich slowly