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Route To Financial Independence and Have The Choice To Retire or Not

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Route To Financial Independence and Have The Choice To Retire or Not

July 23
10:16 2020

Today is the day to start planning for your retirement. No matter how old you are, taking control of your financial future must be important to you. Remember, retirement does not mean that you have to work, it also does not mean that you don’t work, but it gives you the choice to whether you’re going to work or not.  What’s important is that you have the choice. For many people, this means giving up their corporate day job and allowing them to set something up themselves. For others, this means never working again, and living the rest of their life sat on a beach or traveling the world. Here are just a few of the many reasons why I continually encourage you to start planning today, for tomorrow. Among the reasons:

  1. None of us know if social security will be around to help us when we need it.
  2. Company pensions? Just look at the airline and auto industries. There are no guarantees.
  3. Not becoming a burden on your children to take care of you.

20’s, 30’s, 40’s, 50’s

Over the years, financial independence does not just mean saving for your retirement, it also means saving to make sure your financially in the right place at the right time. If you are in your 20s or 30s, you should have started an emergency fund of at least six month’s worth of salary. I would also highly recommend that you join your company’s pension plan if this is an option, or set yourself up a self-invested pension scheme if it’s not. 

If you are in your 40s or 50s, the clock is ticking. You should have increased your retirement savings to keep pace with your current income, maximized all contributions to your ISA’s and pension plans and if you are over 50, take advantage of catch-up contributions.  You also need to sit down with a financial advisor to review your financial, estate plan, insurance needs, on a yearly basis.

If you are over age 60, hopefully you have made good choices and have the cash and income to lead a comfortable retirement when you are ready, not when your money is.

Financial Information

You can never get too much information or guidance on your retirement strategy. However, as I have said in the past, if you are someone who does not allow others to manage your money for you, then a self-directed retirement account is for you. 

Last year, more then 60% of all taxpayers used a professional to assist them with their taxes. As tax returns get more complicated and as your assets continue to grow, it might make sense to seek professional advice 

How to Find the Right Adviser

It’s your money, your estate, your life, and you need to protect it. Though I am sure you make smart decisions, sometimes we become more emotional about our money and our retirement as we age. At times we do need another opinion. Here are a few suggestions to help you search for the right adviser no matter what professional you need.

  1. Make sure they have years of experience, not someone just starting out. Those years count. They probably have seen what you are seeking and are able to assist.
  2. Meet them at their office, not your home. See if they “look” established.
  3. Go for fee only, no commissions or other surprises.

If they spend the time asking you questions about your situation and listen, they could be the right experts. If they do nothing but talk, run. Hopefully these tips will help you select the professional you need to accomplish your goals. 

When Do You Need Tax Advice

So, how do you know where to go for tax help? To determine the answer, ask yourself these questions:

  1. How complicated will the return be? If you are depreciating investment property, taking a loss on a business, or faced with specific tax related issues that would require some expertise, go with the professional.
  2. If your return is not that complicated, but you either don’t have the time or the energy to do it yourself, perhaps one of the chains would be a good solution.
  3. If you are savvy, have the time, and do not have too complicated of a tax return, you could do it yourself.

Remember, everyone makes mistakes. Even a pro can, so review and understand your tax return before you send it in. Make sure the person or company who prepared your return signs it also. Never allow someone to do your taxes and not sign the return.

Paying Bills

Many of us are in charge of paying the bills, planning the budgets, paying our taxes, and much more. How can you develop a simplified system so you can avoid spending hours paying bills and have more time for yourself?

  1. Keep a file of all expenses and keep it in the same place where you can get at it whenever you need it. If you and your significant other don’t share expenses, create two separate files.
  2. Consider paying bills online, where you can be constantly reminded of what and when something is due and can avoid late fees.
  3. Set up automatic payments for your regular bills like your mortgage to make your life easier.
  4. Get rid of clutter. You only need to hold utility bills and credit card statements for a few months. Hold onto your pay stubs until your W-2 arrives and monthly financial statements until you receive your year end statement.

Have You Started Investing Yet?

Have you started investing? If not, what are you waiting for or are you procrastinating while you try to figure out what’s best. Whether it is investing, career change or a life change, procrastination is common. Why?

  1. We fear failure. Or, believe it or not, we fear of success!  These fears can put us at a standstill.
  2. If you’re a perfectionist, the need to control every outcome can be paralyzing.
  3. Low self-esteem or the feeling that you cannot do something could stand in your way.
  4. Also, feeling like you must do everything without asking for help can be overwhelming to the point of doing nothing.

Everyone is guilty of procrastination. I find this very stressful and unsettling, and continued to do this until I finally learned a couple of techniques that helped me overcome procrastination problem.  I hope these techniques will help you too:

Take small steps.  Don’t feel like you must go out tomorrow and make 100 offers on property. Crawl before you walk, before you run. Doing one small thing every day will go along way toward achieving your goal and will help you feel like you’ve accomplished something.

Visualize the outcome. Whatever your objective, visualize finishing it and being successful. By keeping the end in mind, and you’ll have a better chance of staying on track?

Surround yourself with cheerleaders. Cheerleaders are people who love you, who are supportive of you reaching your goal, will offer you the encouragement to dream and will continue to cheer you on. Surrounding yourself with positive people who have told me “I can” instead of “I can’t” has made a tremendous difference in my life.

Final Thoughts

Retirement is important and its also something that you cannot do overnight. Unless you win the lottery, you’re going to need to save monthly to achieve your goals for the future.

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