Table of Contents
1.
Introduction
2.
Before We Begin
3.
Understand “Comfortable Retirement”
4.
So, How Do You Retire Comfortably
4.1
Start With Your Retirement Vision
4.2
Master the Art of Living Below Your Means
4.3
Invest Early and Consistently (Even With Small Amounts)
4.4
Eliminate High-Interest Debt Early
4.5
Consider Alternative Income Streams
4.6
Protect Your Health and Your Wealth
4.7
Build a Safety Net
5.
Conclusion
Introduction
Growing up, I learned a secret from my father. He had started his career in his mid-20s and was earning less than $45,000 a year. Like many people, my dad assumed that having financial comfort in his retirement was reserved only for people who earned high incomes, like six figures. These thoughts, he said, had continued with him until after two decades of budgeting, investing, and learning from financial advisors, when he found out that he didn't need a six-figure salary to retire comfortably.
What he did was to be consistent with a clear strategy and understanding of how money really works over time. In this blog post, I want to share with you practical and proven ways to build a retirement you can actually enjoy. This is something I learnt from my father, and you do not have to be chasing huge paychecks or impossible investment schemes to enjoy your retirement.
Before we begin
Understand "Comfortable Retirement"
Having a comfortable retirement doesn't necessarily mean you have to travel in luxury and beachfront property. For most people, it means that:
- You must have enough income to cover the important parts of your living without stress.
- Being able to enjoy discretionary spending like hobbies, dining, and traveling
- Not relying on adult children or the government for assistance.
So, How Do You Retire Comfortably
1. Start With Your Retirement Vision.
Before you even think about the numbers, think about your retirement visions.
- Where do you want to live? (In a lower-cost state or country can even stretch your savings)
- What kind of lifestyle do you expect to have? (Minimalist, Active Traveler? or Homebody?)
- What are your non-negotiables? (Healthcare quality, hobbies, etc.)
Having a clear vision helps you to set the right savings goal.
2. Master the Art of Living Below Your Means
You have heard it before, but here is why it is important. Spending unnecessarily is outrageous. Any amount of money you don't spend can be invested to grow your future.
Here is what my dad personally did to reduce his expenses in his 30s
- Rented smaller apartments, which caused less spending, and invested the money he didn't spend
- He caught the cost of cars. Reduce his cost for fuel purchase
- He saved every month without missing.
Over time, he was saving a lot for his future than he even thought of.
3. Invest Early and Consistently (Even With Small Amounts)
If you invest $200 per month starting as early as age 25, with a modest 7% annual return, then you could have over $500,00 by the age of 65. Keep waiting until 35, and you will have just half of that amount.
As financial expert JL Collins, author of The Simple Path to Wealth, Puts It:
“Spend less than you earn, invest the surplus, and avoid debt. Do this long enough and you will win.”
4. Eliminate High-Interest Debt Early
One of the biggest retirement killers is debt. Paying 18 to 25 percent on credit cards can even wipe out your savings. Here is how you can approach it:
- List all your debts with their balances and interest rates.
- Pay off the highest-interest ones first (the avalanche method).
- Consolidate or refinance if possible.
-
Once debt-free, put those payments toward retirement savings.
5. Consider Alternative Income Streams
Retiring comfortably does not always mean you should stop working. No, you can engage yourself in doing some part-time work that will help increase your income. Your work part-time could be made of gardening, tutoring, writing, freelancing in your field, etc.
6. Protect Your Health and Your Wealth
In retirement, healthcare is one of the largest expenses. The Fidelity Retiree Health Care Cost Estimate (2024)
suggests an average retired couple may spend over $315,000 on healthcare.
Ways to Prepare
If you’re eligible, open a Health Savings Account (HSA), which offers triple tax benefits.
Take care of your health with good habits like exercise, nutrition, and regular checkups.
As you approach 65, review your Medicare and supplemental insurance options.
7. Build a Safety Net
Even with careful planning, unexpected costs happen.
Your emergency plan should include:
- Keep 3 to 6 months of living expenses in a high-yield savings account.
- Make sure you have health, life, and disability insurance.
- Have important estate documents in place. They could include a will, a healthcare directive, and a power of attorney.
Conclusion
I hope this article was helpful to you. With the right steps and self-discipline, I believe the points I shared with you will guide you to retire comfortably without a Six-Figure Salary.
