Summary: Listen, there’s lots of noise and bad advice around planning for your future. But with the right knowledge and preparation, retirement planning can actually be simple and effective! Learn the 7 steps to start retirement planning today.
We’re tackling a somewhat scaaaary topic today — or, at least it CAN be scary without the right preparation.
Yep, we mean the dreaded R-word…RETIREMENT. 😱😱
The reason retirement planning is so darn hard for so many people is that there’s a lot of misinformation about it. Growing up, you might’ve learned that saving your pennies would be enough to sustain your golden years.
Or maybe that 401(k)s were supposed to do the trick.
Butttt the reality of it is that the old ways of retirement planning just are NOT working anymore. With inflation, longer life expectancies, and the high cost of living, many people will not have enough to fund their retirement by just saving.
Get this: Americans feel they will need about $1.9 million on average to retire,which varies depending on lifestyle goals and location. But according to a 2022 Vanguard report, the average household has about $141,542 currently set aside for retirement. If those savings are just sitting in a bank account, let’s be honest…
That’s not going to cut it for most retirees.
Here’s the good news, though: there’s a better way to financially plan for your future retirement, and it is not too late to start! Hop on the no-stress express, as we cover 7 steps for a financially secure retirement. 🙌
Here’s what’s in store today! ⏬
- First, let’s define what retirement actually is
- It all starts with your goals
- 7 steps to a financially secure retirement
- When should you start retirement planning? Yesterday
First, let’s define what retirement actually is.
Traditionally, retirement is the phase of life that you enter after you stop working. The origins of retirement are important to remember, so here’s a brief history lesson.
In 1880 retirement started becoming a thing, because people in their 60s could not physically continue working in the labor force. That was also around the time when social security and medicare were gaining traction. Companies were starting to offer retirement plans as incentives to inspire loyalty and commitment from employees.
Of course, the world has changed a bit since then.
Now, we see an increase in self-employment and job hopping, and the idea of staying at the same job for 30 years doesn’t sound as appealing as it once did.
People want the freedom to live and work the way they want, which is awesome! But should you have to choose between 30 years of loyalty to one job or having to stress and worry about your retirement?
Not if we have anything to say about it!
The Kitti Sisters are here to help you have your cake and eat it too. Work how you want, live how you want, aaaand enjoy the retirement that you want. 😏😏
Speaking of what you want, we all have different ideas of what those retired, later years will look like.
Some people want to travel the world – excited about the freedom to adventure wherever they want. Others would love to buy a fancy vacation home where they can find true peace and relaxation. Aaaaand yes, there are people who don’t WANT to stop working, and can’t wait to devote more time to their passion projects or side hustles.
The point is, you want the freedom to choose how you want to spend your golden years. ✨
That’s what we’re all about. We want to help you find the financial freedom to fund whatever type of retirement you want. And with the right tools and knowledge, it’s totally possible to make your future dreams come true.
Now, it’s time to figure out what those dreams are.
It all starts with your goals.
Before we get into the action part of retirement planning, we need to talk about goals. Because all the right steps won’t get you anywhere if you aren’t sure where you want to go. So, let’s get specific with your retirement goals.
Write down what you want to do, where you want to be, and how you want to live after retiring. Include lots of details because hey – this is your life. Might as well make it a good one! 😉
Then, do a little math to figure out how much money you would need to fund your lifestyle goals.
Now, we know this can be a tricky task.
You’ll want to research the cost of living of your future location, estimate the expenses you’ll have, and even take inflation into account. It won’t be exact, but it will give you an idea of how much money you will need to maintain your future lifestyle.
Once you know a rough estimate, you can start taking simple actions to get where you want to be. Preparation is the key to success, and goals are what will fuel and inspire your preparation.
7 steps to a financially secure retirement
Ready for the fun stuff? 😌😌
We totally believe retirement should be a staple in the school system, buttt… it’s not. So, don’t feel overwhelmed if all of this is new to you. You’re not too late, and you can set yourself up for a happy retirement. Just take it one step at a time.
Step 1: Know your timeline
Your retirement timeline isn’t the same as everyone else’s.
So, let’s think about your goals. What age do you WANT to retire? You can totally change your mind later if you need to, but setting a timeline will help you decide what type of investments will get you there. Can you live on the wild side sometimes, orrrrr should you be extra conservative in your approach?
It all depends on your own timeline. 👌
Step 2: Establish your freedom metric
Ahh, the freedom metric. Maybe you’ve heard us mention it before because it is very important in planning for your future.
👉 Your freedom metric is the amount of money you need to basically go on autopilot — and when you reach this amount of ongoing income, you can cut the financial stress and rest assured that your expenses will be covered.
Basically, all those goals you have for your future lifestyle? Do a little math to find out how much money you will need to sustain them.
Trust us, a little math now will make your future life SO much better. Having this all figured out will give you confidence in your financial decisions, and a big sigh of relief when you get to your retirement age.
Step 3: Calculate your after-tax rate
No one wants to deal with tax stress. So, make sure you’re taking taxes into account now, while setting up your investment portfolios.
Your after-tax rate will be your takeaway financial benefits AFTER subtracting taxes from the earnings. It can be a real bummer if taxes take you by surprise later on.
But planning ahead will help you set the right expectations for your real estate investments.
Now, if you’re wanting a way to significantly reduce the taxes you owe on investments, we highly recommend apartment syndication.
🏢 Multifamily apartments are very tax-friendly investment assets that can help you secure your future while paying wayyyy less in taxes.
Pssst, check out this resource for how to Kiss Your Tax Stress Goodbye with Apartment Syndication!
Step 4: Decide your investment risk-tolerance
You’ll get to a point in retirement planning where you’ll need to decide how risky you want to get with your investments — and there’s not a one-way-fits-all approach to this because everyone has different goals.
Now, we can’t say that taking big risks doesn’t pay off sometimes.
Because it totally can!
But there’s also something to be said about taking less risk to create steady growth over a long period of time. It’s like a balancing act that allll has to do with your own personal goals and timeline for retirement.
Step 5: Begin saving for investments
We always say that saving alone is NOT enough to help you reach your retirement goals, but that doesn’t mean you shouldn’t save at all.
You see, we don’t mean setting aside pennies into a piggy bank or a savings account, and not touching it until retirement. You just won’t get much growth on those savings. That’s why you’re going to put your savings into cash flow producing investment opportunities. 🙌
That’s how you’re going to make the money, honey. Start saving now, so you have money to put to work in the right investments to grow your wealth and secure your retirement.
Step 6: Choose how to invest to start growing your wealth
You have plenty of options for investing. That can make your choice difficult, UNLESS you have already done the work of getting to know your goals inside and out. Let your goals be your driving force behind things like how much risk to take on, or how long your money can be tied up in a certain investment.
You’ll find that the more you know about what you want and how you want to live, the easier your investment decisions will be.
Apartment syndication, for example, offers lower risk and very little time and energy from investors. If you’re not looking to get your hands dirty with the day-to-today processes of investing, this could be a great choice for you!
Step 7: Start estate planning
Lastly, you’ve put all this effort into planning for your retirement. Now, don’t forget to PROTECT it, too.
Many people think they need a Downton Abbey castle before making an official estate plan, butttt that’s just not the case. Anyone can make an estate plan that will dictate what happens to your wealth and assets if anything were to happen to you.
It’s just smart to be prepared…which is always our motto. 😉
When should you start retirement planning? Yesterday.
Take this as your sign, the time is NOW.
We would never say that to stress you out. Because no one needs more stress or worry in their lives, we know. But taking action towards securing your future is important because nothing can happen without action.
So, your future self will thank you for the work you’re putting in today. Start setting up your goals and figuring out what you want, then follow these simple steps to kick your retirement planning into gear.
You’ve got this! And we’re here to help. 😘
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