Financial Planning: Preparing for Retirement

Retirement isn’t a bridge that you can cross when you get there. Anyone can retire. But to have a safe and fun retirement, you have to prepare carefully and diligently stick to your plan. Retiring without financial flexibility and security is like unemployment at 60. And that’s something you wouldn’t want to go through after all the years of blood and sweat.

Fortunately, you are not alone. Here are the four major tips that you’d need to hear to help you become financially ready for retirement.


The first step is to understand the 50-30-20 rule and following it at all times. This rule means, 50% of your monthly income goes to things you can’t live without. Rent, electricity, food, gas, and water. These things. Strictly these things only. The 30% accounts for what you want but could probably live without, like your premium streaming and music subscriptions or eating out and getting food delivered. And the remaining 20% goes to savings.

Now the rule above has been tried and tested. Most people find it helpful. However, if you really want to be financially free in the future, then you’d have to tweak it a bit. Putting aside 40 % of your monthly income to savings would really go a long way. And that doesn’t mean that you’re not gonna have fun anymore. Saving actively means putting in the effort to consciously opt for cheaper alternatives. Cooking at home is a financially wiser decision compared to spending money on gas and parking so that you could spend more on pricey food.


Now, dividend stocks can really be profitable, especially if you know what you’re doing. But that isn’t the only investment you can make. Starting a business and owning product patents can become great sources of passive income in the long run. Starting a business while the market is down is the perfect opportunity for you to ride the waves as it eventually goes up again. And if your strong suit is coming up with ideas nobody even dares to think of, then getting your ideas patented can potentially help you earn millions. Take Pet Rock as an example. They sold ROCKS and had a $15 million profit.

Investing in properties and flipping them into rentals can also be a smart move. As time progresses, the value of land increases with it. If you have the means to buy a property right now, do not waste another second. The market value of properties would only go up in time. You can even focus on getting properties in third-world countries since it would be much cheaper for now. And whether you flip and sell the property or get into the home rental industry, the probability of the value of your investment doubling is high.

The main concept is to avoid stagnant money in the bank (or your drawers) and grow them constantly as you go about your life.

putting a coin into piggy bank


The importance of health insurance cannot be addressed enough. In case of critical illness or major accidents, this will help you spend less on surgeries and other hospital expenses so you can have more money for hospice care and rehabilitation. Think of health insurance as a form of investment. Basically, it’s paying a comparatively small amount while you are healthy so you can have a larger amount to spend when you’re not.

There are several options to choose from. And whether you decide to have private or government-run medical insurance, the important thing is you decide to have one. Make sure to do your research before choosing one, though. Finding the most suitable insurance plan can increase your chances of becoming financially ready for retirement earlier.


This may be found last on the list, but it is the most important of them all. You can’t really be financially free if you are chained by past debts. And you certainly cannot spend your 60s paying debts you acquired when you were 20. Work on paying off your mortgage as early as possible and avoid getting loans to pay off previous debts. Those two steps are essential in avoiding a whirlpool of interests.

This is connected to the first tip. Find the discipline to establish personal rules in spending. If you can’t afford it without a credit card, then you shouldn’t buy it. If you can survive without a credit card, then you don’t need one. If you’ve survived for years with that salary, then getting a pay increase should not change your budgeting at all. Visualize your goal. Imagine buying clothes without looking at the price tag. Imagine ordering steak without checking the menu. Imagine not needing to go to work. Visualize the life that you want. And use that image to push through.

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