Retirement. It’s the dream we all work for. We work away at a job we may not even like for the majority of our lives, all to reach that end goal. But what if this was the year? What if 2022 was the year you decided it was time to retire?
Well, guess what. You can! And frankly, it doesn’t matter what age you are. You could be 75, you could 35. If you want a retirement lifestyle, it’s really up to you. All you have to do is follow these tips.
Create an emergency fund
Emergencies happen. So before you even think about retirement, you need to be prepared for the worst. What experts recommend is coming up with an emergency fund that makes up about 30% of your annual income. That way, should a worst-case scenario happen, you will have money stashed away if something happens.
But even better, put that cash in a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). That way, your emergency fund can be making cash while you’re not using it. That will simply create a strong cushion should you need it at any point.
How much will you need?
Next, create a budget. Write down everything you need to spend, and everything you don’t. Now, I’m not the type of person to them say don’t spend on anything you don’t need. That’s simply not realistic. Instead, give your take-out, movies, clothing, etc. a budget so that you don’t ever go overboard.
That budget will also help you figure out how much money you’ll need coming in for the rest of your life. That could be quite a high number. The average spend for any household is around $68,000 in Canada, as of 2019. That’s probably closer to $70,000 by now. So figure out how you’re going to bring in that kind of cash for life.
Of course, I have some ideas
First of all, don’t quit your day job. Yet. Put aside as much cash as you can, whether it’s in your TFSA or RRSP or wherever. Put it aside through automated contributions so that you don’t even have to think about it.
But of course, you also have to pay the bills. So if you’re serious about retirement, especially if you’re young, you’re going to need other revenue streams. Luckily, I have some ideas for that too.
The side hustle is a great way for you to bring in cash for the rest of your life. It could be a passion project you could sell, like woodworking or crafts. It could also be a simple solution like transcription services or renting out garage space. In any case, find something you can keep up with and allows you to do it even while you’re still working your day job.
Finally, consider moving! If the big city is really only keeping you for your job, then why stay? Find a cheaper place to live, sell your place, and keep the cash! That’s a great way to fire up your retirement income.
Foolish takeaway
There are many ways to bring in long-term cash for those seeking retirement. Even if you’re young. You don’t have to wait around for it to be too late for you to enjoy it. Seek out other revenue streams, invest, and prepare. That way, you can enjoy retirement as soon as this year!
