As a skilled tradesperson, you have likely invested years of your life learning your craft, honing your abilities, and building a successful career. Now, as you approach retirement age, it’s crucial to start thinking more seriously about preparing for life after work.
Retirement planning is often an overlooked aspect for many skilled trades workers, but lack of planning could lead to severe financial difficulties down the line. In the following post, we’ll explore the importance of retirement planning and how you can secure a comfortable future after retirement.
Understanding the Importance of Retirement Planning
Retirement planning can have a significant impact on your quality of life once you retire. However, it can be a challenging prospect, especially considering the day-to-day demands of work, family, and other responsibilities.
The truth is that the earlier you start retirement planning, the better off you will be when it’s time to retire. A critical component of retirement planning is considering how much money you will need to cover your living expenses once you stop working.
Furthermore, given that people are living longer lives and the cost of living is continuously increasing, putting some thought and effort into your retirement plan is crucial.
Unfortunately, the truth is that governments across the world are continually cutting back on retirement benefits. Also, pensions and other retirement benefits that were once considered secure are no longer reliable.
Therefore, it is up to individuals to take responsibility for their retirement plans and ensure that they have sufficient funds to cover their living expenses throughout their retirement years.
The bottom line is that without proper retirement planning, you are putting your financial future in jeopardy. Securing a Comfortable Future
The good news is that there are numerous ways you can start preparing for life after work. From saving for retirement to making wise investment choices, taking small steps today can have a significant impact on your future.
There are two primary ways that people prepare financially for retirement: retirement savings plans (e.g., an IRA or 401k) and non-retirement savings plans (e.g., a savings account or taxable investment account).
Most professionals recommend a two-pronged approach. This approach is to use both retirement and non-retirement savings to ensure that you have the financial resources you need for retirement, regardless of how long or short it may be.
The earlier you start saving for retirement, the better. The longer your money has to grow, the more significant the financial cushion you’ll have when it comes time to retire.
Here are a few retirement strategies that every skilled tradesperson should consider:
Start Saving Early
The most straightforward way to secure a comfortable retirement is to start saving as early as possible. Starting early can allow you to take advantage of the power of compound interest, which can help grow your savings over time.
Ensure You Have Sufficient Life Insurance
Make sure you have enough life insurance to provide for your family in the event of a possible death. As a skilled tradesperson, you may work in hazardous environments where the risk of accidents is higher than in other lines of work. Insurance coverage can help you and your loved ones to relax, knowing they’ll be adequately taken care of financially in the event of an unexpected tragedy.
Maximize Your Employer’s Retirement Plan
If your employer offers a retirement plan, such as a 401(k), make sure to contribute the maximum allowed. Or at least to match your employer’s matching contributions as much as possible. This will help you build your nest egg and take advantage of employer contributions towards your retirement.
Consider Tax-Sheltered Accounts
Another way to save for retirement is through tax-sheltered accounts, such as traditional or Roth IRAs. Contributions to these accounts are tax-deductible, and the money grows tax-deferred until you withdraw it in retirement.
Bottom Line
If you’re a skilled tradesperson, retirement planning should be a vital part of your overall financial strategy. You’ve worked hard to build your career, and the goal is to enjoy the fruits of your labor in retirement.
Be sure to start by understanding how much money you’ll need to cover your expenses and then take practical steps to start saving for your future. Remember, time is your most valuable resource. The earlier you start planning, the more time you’ll have to build up your savings and secure a comfortable retirement.
> For one on one or group assistance with personal finance, STR recommends that you check out the following resources:
> Inaccuracies with Bureau of Labor Statistics (BLS) data: Many of our blog posts will quote BLS data. SkilledTradeRescue.com has been able to identify that data quoted specifically for Skilled Trades can be as much as 50% LOW in many USA labor markets. For more information on these inaccuracies please visit the STR national labor survey page at the link below. On this page there is a video containing the latest information at the top of the page as well as other information. If you currently work in skilled trades, PLEASE consider participating in our national labor survey.
