4 tips that will help you avoid being broke at age 60

Many financial advisors warn that you should start planning for retirement as early as your twenties. While that may seem a bit excessive, you should keep in mind that you need as much time as possible to save.

We all know someone who ignored this advice – someone in their late 50s who is beginning to realize they don’t have enough money to retire. Maybe they had bad luck losing jobs, maybe they got a divorce, or maybe they were just undisciplined when it comes to budgeting and saving. But whatever the reason, they are facing a difficult reality of trying to make up for lost time.

Tip #1 – Start planning and saving as early as possible

The earlier you begin saving, the more money you will have when your golden years arrive. The moment you get your first job, you should begin a savings account. You may not put much into it at first, but at least it will always be there collecting interest and taking advantage of the compounding effect of money.

Even if you don’t start saving with your first job, you should at least begin planning. That means gathering information about money, learning about various financial tools such as retirement accounts like a 401(k), and identifying goals for yourself in terms of what kind of lifestyle you want to have. These goals will dictate how much money you want to have saved by a certain age and can help you estimate how aggressive your savings or investing plan needs to be and from what age.

Tip #2 – Leverage employee benefits

If you are lucky enough to have a job with benefits and your company provides a 401(k), you should begin contributing immediately, and choose to contribute the maximum amount. If you start out that way, you will never miss that amount in your paycheck. This is a discipline that is easier to manage if you start early.

One of the biggest mistakes many people make is cashing out their 401(k) the first chance they get rather than allowing it to roll over into a new job. You should resist this if you can, even if there are large purchases you are dying to make. If you must switch jobs, it is vital that you transfer the 401(k) if at all possible. If it is not possible, find a new retirement fund immediately. That money is your future.

Tip #3 – Invest in larger assets as you age

In your thirties, you should feel well established in your career. This is the time to start making wise investments that will carry you through the long term. In a volatile economy, commodities are always the better choice, but you can be ready to make changes when things are looking up. Real estate has also been a popular choice for long-term investments, but you can run into snags if you don’t plan your purchases well. Be wary of anything that looks too good to be true, because it usually is.

Tip #4 – Develop a relationship with a good financial advisor

To get the most out of your retirement investment choices, you should work with a qualified and experienced financial advisor. He or she can help you navigate the current economic environment so that you can be sure you are making the right choices. Remember that you are working with an expert, so it will always be wise to take the advice you are given seriously. Even if you aren’t sure what the outcome will be, you can be sure the expert has been through the same situations with other people. He or she will have a finger on the economic pulse, which will allow him or her to lead you wisely.