Like anything else in life, retirement is what you make of it — and what you can afford.
The actions you take in 2024 can put you on a path to the security and choices that a seven-figure nest egg buys, or they can doom you to a future of financial insecurity and late-life money stress.
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GOBankingRates spoke with two financial advisors who work with wealthy retirees. They shared the wealth-building secrets of the rich, with tips on what you can do in 2024 to join their ranks when it’s your time to retire.
The Traits and Tendencies of People Who Retire Rich
Donald N. Hoffman is a partner at Eisner Advisory Group in the firm’s Baltimore office and the president of The Prosperity Consulting Group in Owings Mills, Maryland. He is intimately familiar with the millionaire mindset, and he has observed commonalities in how wealthy retirees earn, spend, save and think about money.
They Prioritize Earning in Their Career Pursuits
Tom Corley, accountant, financial planner and author, spent five years interviewing 233 millionaires. His research revealed that 18% were senior-level executives at large companies, 28% had traditional 9-to-5 jobs and 51% were entrepreneurs.
“But they all had one thing in common,” he wrote in a guest post for CNBC. “They quit their mid- to late-career jobs, saying they felt it was the only way they could truly succeed and build wealth. Some left to start their own businesses, while others found lateral roles that offered more growth opportunities and a higher salary.”
Whether they are employees, executives or entrepreneurs, millionaires strive to succeed with wealth building in mind.
“One of the keys is either they worked very hard at building their business or worked very hard at their jobs,” Hoffman said. “I’ve seen situations where people take a lot of risks and work outside their comfort zone to either build businesses or at their job and create levels of success beyond what they anticipated.”
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They View Spending as a Roadblock to Their One True Love: Saving
Maximizing your income leads to wealth only if you save and invest it instead of turning it into merchandise.
“It is not just about success and earning money,” Hoffman said. “It is also about spending. Many of our wealthy clients had ordinary jobs that they excelled at and enjoyed their lives but had a balance between saving for the future and enjoying their lives — not wasting money on things that were not that important.
“People who are successful in building millions of dollars in retirement have engaged in the process of saving from a young age. They maximized their 401(k) plans. They have automatically invested monthly from their earnings. They work hard to pay off debt as they do not want to go into retirement with debt, as nobody should.”
They Apply the Millionaire Mindset to Their Lifestyles
Earning and saving are part of the puzzle, but wealth builders tend to share a common outlook on money that enables them to grow fortunes through the lifestyles they adopt and those they shun.
“You don’t need to go to Starbucks every week and spend money on things that aren’t important,” Hoffman said. “We know so many multi-millionaires that weren’t about how much they made, but how much they spent and saved during their lives. I used to save every penny when I was younger, and I still do now.”
The most important step to take in 2024 is to start thinking and living like a millionaire until you become one.
“In summary, the real keys to success have been living a balanced life, not worrying about what people think of what you have or don’t have, having consistent savings, reasonable spending and not living beyond your means,” Hoffman said. “If these key elements are put into place, most people can retire with at least a million dollars.”
‘Seven Tips for a Seven-Figure Retirement’
Kami Adams is a financial advisor and the CEO of Creative Legacy Group, a senior benefits firm specializing in Medicare, annuities and final expenses. She works with some very wealthy retirees, and she has outlined what she calls “seven tips for a seven-figure retirement in 2024” that you can follow to become one yourself.
Diversify Your Investments
Don’t put all your eggs in one basket is among the oldest wealth-building maxims. The wealthy live by it — and you should, too.
“Mix it up with stocks, bonds and real estate for long-term growth,” Adams said.
“Money that is saved should be properly invested in a balanced portfolio that does not take on undue risk,” he said. “The get-rich-quick stock — that never works most of the time. It hurts people’s retirement plans. So, balance in life and in investing will get you to that goal.”
Apply Long-Term Planning To Long-Term Goals
Unless retirement is imminent, your investing strategy should take volatility for granted. Your strategy, therefore, should be slow, steady and tailored for the long game.
“Set clear financial goals for discipline during market ups and downs,” Adams said.
Review and Adjust Regularly
While you should stay the course with your overarching strategy, you must periodically check in with your holdings and modify them as you learn and grow as an investor.
“Evolve your strategy with regular portfolio check-ins,” Adams said.
Employ Tax-Efficient Strategies
Forfeiting dollars to the IRS unnecessarily is the same as reckless spending. Protect the fortune you’re trying to build by keeping as much of it out of the government’s hands as possible.
“Optimize returns with tax-friendly moves and harvesting,” Adams said.
Embrace Technology and Always Keep Learning
You have the luxury of investing in a time when ordinary people have access to tools and information once available only to market professionals. Put them to good use and keep up with changing conditions and emerging ideas.
As Adams said, “Stay informed about market trends and investment opportunities.”
Plan for Healthcare Costs
With advanced age comes advanced healthcare needs and advanced healthcare bills. Don’t let your local medical center gobble up all you’ve built.
Adams suggested, “Consider HSAs and insurance for future healthcare expenses.”
Seek Professional Guidance
Finally, remember that professional assistance is not an expense; it’s an investment. Don’t go it alone.
Adams recommended: “Connect with a financial advisor for personalized strategies.”
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This article originally appeared on GOBankingRates.com: We Advise Wealthy Retirees: Here Are Tips for 2024 To Help You Retire a Millionaire
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