Too many young people ignore retirement planning because it is “too complicated.” As you know, we want to keep your finances simple. Complexity can make you feel like you are either overwhelmed or wasting your time to the degree that you give up trying altogether. Ignoring your finances is a recipe for disaster. If you are going to give up, it is better to reduce it to something simple so that you are better off than you would be if you ignored it altogether.
Retirement planning can be simple too. It doesn’t have to be overly complicated. This means that you can prepare for your retirement financially without feeling overwhelmed and without committing too much time. Here are some basic steps to implement a simple retirement plan.
Start Investing Early –
By starting to invest early on, you can save yourself a lot of trouble. You don’t have to play catch up because you are ahead of the game. Compound interest is working its magic and exponentially increasing your net worth without any work on your end. The longer you wait to invest, the less you will have in retirement. It IS that simple!
Invest a LOT –
The more money you invest, the lower return you will need to get with your money. While getting a large return on even more money would mean even less stress in retirement, by investing more money now, you set yourself up for a strong future. Many people stress about not having enough money in their retirement nest egg, but if you start investing aggressively, you can obtain financial security earlier and with less time involved actively managing your portfolio.
Invest Passively –
While it may be tempting to invest in individual stocks, you have the option to invest passively. This means buying index funds or mutual funds that are going to be well diversified. While this may mean a lower return than investing in good stocks, most investors do not outperform these types of funds. Why work really hard to try and beat them when you can take the safe route and keep your time free? There is no simpler way to secure your retirement without the time involvement than investing in passive funds.
If you are looking for an easy way to start saving for retirement, these are the basic principles. Live simply now. Start Early. Save and Invest a lot. Choose Passive Funds. It really is that simple. While many people will convince you that you NEED to know much more than that, it is not necessary. By choosing to follow this simple retirement plan, you can prioritize other tasks that are more important.