4 Easy Tips For Diversifying Your Retirement

For many professionals, saving money for retirement became harder than ever during the pandemic. According to Pew Research Center reporting, 44% of non-retired adults think it will take years to get back on track for their retirement goals. For individuals who lost their jobs, 62% of them found it more difficult than their working peers to keep their money goals on track. Here’s the silver lining, though: Many people have stayed somewhat on track to achieve their dreams of leaving the workforce on a fiscally stable note. Based on figures culled from the Board of Governors of the Federal Reserve System, The Motley Fool estimates that about six out of every 10 adults under age 30 have a budding nest egg. So all is hardly lost, even if you’re someone whose retirement savings is more paltry than prosperous. Of course, knowing how and where to begin can seem overwhelming. Try these simple ideas to start creating a diversified, dependable retirement portfolio that will serve you well in the future.

1. Take advantage of your employer’s 401(k) program.

Sign up for the 401(k) vehicle your employer offers if you haven’t already. Once you do, try to max out the money you contribute to max out your employer match. As 401(k) plan consultant Rick Unser explains, the easiest way to set up your 401(k) contributions is by spreading them evenly throughout the year. That way, you won’t find yourself putting in too little. Not sure how your company’s 401(k) works? Ask for a sit-down with someone at your organization or a representative of the 401(k) plan provider. You deserve to know all the options at your fingertips so you can make the wisest choices for your household. Just make sure you construct a realistic monthly budget first to help you determine how much money you can afford to put into your 401(k).

2. Explore alternative retirement assets.

Saving for retirement isn’t a one-size-fits-all experience. Consequently, you may want to experiment with non-traditional investments. For example, a site like Rocket Dollar allows you to branch out into alternative assets like cryptocurrency or startups. This gives you the freedom to dabble in investing in emerging assets rather than classic stocks and bonds. How much of your disposable income should you commit toward alternative assets? Most first-time investors like to start small. Test the waters first. You can always change your core contribution after you become more confident as an independent investor.

3. Purchase rental properties.

The real estate market is red-hot at the moment. CEIC data shows tremendous year-over-year growth in United States’ housing prices since the beginning of 2020. In September 2021 alone, the quarterly growth rate stood at a remarkable 18.4%. Therefore, you may want to start looking for real estate investment properties to rent. Even if becoming a landlord was never something you seriously considered, you might want to think about it now. Real estate can be a source of passive income, especially if you hire a property manager to do the heavy lifting. The longer you own an occupied property, the sooner you’ll begin to see significant returns. Many landlords are able to pay off their mortgages early, allowing them to keep a higher percentage of rent. And it’s hard to beat the tax benefits of owning real estate.

4. Open a 529 savings account.

Do you have children who will likely go to college one day? You shouldn’t have to dip into your retirement savings or incur IRA or 401(k) early withdrawal penalties to offset their tuition. Instead, open up a 529 savings account. While not a retirement vehicle, a 529 savings account can be beneficial in many ways as part of a thoughtful wealth-growing strategy. First, you’ll get some tax advantages depending upon the 529 plan you choose. Secondly, it’s a low-maintenance way to set aside funds steadily. Finally, you can change the beneficiary if situations change. Some parents end up using part of a child’s 529 savings for their continuing education, particularly if the child gets myriad scholarships or decides not to attend a four-year university. Certain investment platforms will even cater to your needs when it comes to setting up an account. Companies like Vanguard give you the option to take the reins on your 529 strategy, or select from a pre-curated portfolio for a seamless integration into your 529 savings account. The idea of retiring might seem more like a fantasy than anything else. But the years will go by faster than you might assume. Make sure you set yourself up for financial success and stability tomorrow by stewarding and growing your money wisely today.