Secure the retirement of your dreams with these easy moves

Retiring can be a daunting prospect. When you’re used to collecting a steady paycheck, the idea of losing it and relying on savings and Social Security can be overwhelming.

The good news? A few simple moves on your part could set the stage for the retirement you’ve always imagined — one that’s fulfilling and devoid of financial stress. Here’s how to pull that off.

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1. Save from an early age

Giving your savings time to grow is just about the best thing you can do for your retirement. Imagine you start socking away $300 a month at age 22, right when you first enter the workforce. If you invest that money at an average annual 7% return (more on that in a minute), you’ll wind up with just over $1 million by the time you reach age 67. Wait just five years to begin saving, however, and you’ll end up with $719,000. That’s still impressive, but it’s a lot less money to live on.

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2. Save aggressively

The 7% return we just used in our example? That assumes an IRA or 401(k) that’s invested heavily in stocks. If you play it safe with your investments, you could end up scoring a much lower return that limits your savings’ growth. If you were to go heavy on bonds in your retirement plan, you might only enjoy an average annual 4% return on your investments. And in that case, you’ll end up with just $436,000 instead of over $1 million, assuming that same $300 monthly contribution and 45-year savings window.

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3. Stay out of debt

Racking up debt can wreck your retirement, even if you accrue that debt years before your career ends. First of all, the more debt you accumulate, the more money you’ll throw away paying interest, and the less money you’ll have the option to save. Additionally, if you carry debt into retirement, it’ll be one more monthly expense you’ll need to grapple with, straining your Social Security benefits and retirement plan withdrawals. A better bet is to steer clear of unhealthy debt and limit yourself to the good kind, like mortgage debt or a car loan as needed.

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4. Grow your Social Security benefits

While you should make every effort to save a nice amount of money to supplement your Social Security benefits, you’ll still want those payments to be as generous as possible. And one guaranteed way to get more money from Social Security is to simply delay your benefits past full retirement age, which is when you’re entitled to your full monthly benefit based on your wage history. For each year you hold off on filing past that point, your benefits increase by 8%, up until age 70. Wait long enough, and you could end up sitting on thousands of dollars in extra benefits per year.

Maybe your dream retirement involves exotic vacations and dinners at fine restaurants. Or maybe it means getting to stay in the home you raised your children in and enjoying local activities and hobbies. No matter your vision, these simple moves could be your ticket to fulfilling the goals you set for yourself.

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