Building Up Your Retirement Savings
Our non-recourse lenders have talked about the different types of IRAs, we’ve talked about different types of retirement accounts, and we’ve talked about how you can use your self-directed IRA or solo 401(k) to invest in rental properties. But in order to retire or to qualify for a non-recourse loan, you need to have sufficient funds in your account. Here are some of the best ways that you can build up those retirement savings.
Have a plan.
The most common mistake people make with retirement savings is thinking that they can put it off until later. But even if you were able to put $300 in a year from the age of 18 — just $25 a month — until feeling more established at the age of 30, that would be $3,600 that could go towards your retirement. That’s a whole lot better than nothing.
Do something now with retirement. Even if you’re not provided with a 401(k) through work, even if you’re not ready to open up a Roth IRA, finding some kind of retirement plan that works for your budget is a good start. It’s easier to build off of an existing foundation than to start completely from scratch.
Make it automatic.
If you take a few hours one day to set up a retirement account, figure out your contributions, and automate your payments, you will be contributing to your retirement without having to give it too much thought. Simplifying and automating the process makes it a lot easier to grow your nest egg, and takes very little energy on your part.
Think ahead.
What age do you ideally want to retire by? Are you fine with working until the age of 70, or do you want to be done before hitting 60? Strategizing about retiring is important for determining how aggressively you should be saving. This helps set a budget in mind, and keep the bigger picture ahead of you.
Set some goals.
Are you just wanting to save, save, and save some more for retirement? Many people opt for this, but for others, the idea of passive income and drastically growing their retirement savings is more up their alley. Consider investing in a rental property with the help of a non-recourse loan to maximize your financial potential.
When setting goals, one of the biggest things to consider is what you want your life to look like when you’re done working (and when that will be). If you’re drawn to traveling around the globe, dining at fine restaurants, and living it up in general, it might be more worth your while to use your retirement account as an investment tool. If you’re comfortable with tending to your garden and hanging out near the grandkids, you still might want to invest with your account so that you can live even more comfortably.
Learn as much as you can.
Setting up retirement accounts and saving for your financial future are big steps. You want to be sure that you’re making the most informed decisions as possible. Consider talking with a financial advisor, consulting with retirees whom you want to learn from, and reading blogs and other publications that can set you on the right course.
Spend wisely.
If you can afford that sports car and it won’t set you back on your retirement plans, go for it! But oftentimes, we can get caught up in material things that we think are important now, which can later impact our retirement savings. Purchasing a modest, reliable, and safe car is likely at least $10,000 less than the aforementioned sports car — imagine what saving that $10,000 could do for your retirement, and how much it will mean later on.
Don’t give up!
You might feel like it’s too late to start your retirement savings, but it’s better late than never. You can absolutely make it happen, even if it means that some sacrifices must be made. Pick a day to thoroughly sit down and set some goals and intentions — it might seem tedious now, but it will be absolutely worth it, and your future self will thank you.
At First Western Federal Savings Bank, we are committed to helping all of our clients by providing financial insights to set them up for success. We’re right up there with the nation’s top non-recourse loan lenders, but we offer a more personal and thoughtful experience for everyone who looks to invest their self-directed IRA as a means to purchase rental properties. And with more than 40 years of experience, we’re proud to be a name that you can trust and rely on, time and again. Contact our non-recourse loan lenders for more information on purchasing rental properties, vacation rental properties, home equity loans, refinancing, and with any other questions you may have.