A while back I talked a little bit about how you should start saving for retirement if you are self employed. We talked about opening a 401(k) savings plan or starting some sort of investment portfolio. While these concepts may seem overwhelming, they're important and they're not the only things you can be doing to prepare for the future.
Make an Actual Plan
If you haven't already, make an actual plan for your retirement. Having a 401(k) is one thing. Contributing money, opening another savings account, cutting back on coffee, and planing to pay down your debt is more realistic. You want to make sure you are solid ground by the time your retirement years roll around. Create a budget that shows your recurring expenses (including your savings), and get a clear idea of what you'll really be paying for during your golden years.
Take Advantage of Employee Benefits
Not all massage therapists are self employed, and that's ok. If you work for a doctor's office or spa you may be lucky enough to have a benefits package, including a 401(k) plan. If you have a plan through your employer, he is probably matching your contributions. If this is the case, make sure you are contributing the maximum allowable so that you are receiving the maximum allowable match from your employer. It may not seem like much, but it will add up over time.
Investment Portfolio Cautions
If you have a separate investment portfolio where you trade or invest otherwise to save, be careful. Make sure you're using a fair broker and make sure you aren't paying too much in fees for making a quick phone call or for making an actual trade. A lot of people start with paper trading so that they will feel more confident when they start trading for real. That's up to you, but you'll still need a broker to help you with the details.
Plan to Work Longer
The average person isn't going to jump right onto the retirement bandwagon at the age of 65. If you work longer, you may be able to collect a larger sum when it is time to collect your social security check. If you get to the age of 65 and have your mortgage paid off, for example, can you reduce your work hours without quitting altogether, giving you the chance to contribute more to your savings? This is a tough question for massage therapists, since the work will eventually take a toll on our bodies unless we move into a management roll. How long can you really work?
Talk to a financial adviser about your future sooner rather than later. The sooner you really start planning, the less stressful your retirement will become.
