If you’re looking to prepare for retirement, we’ve got a couple of helpful tips for you.
Sure, Social Security should be a part of your retirement resources. After all, we’ve all paid into this program and deserve to be paid back.
But while some people live solely off these benefits, they’re better used as supplementary resources. Combined with these strategies, you can enjoy a relaxing, healthy, and fulfilling retirement.
Prepare for Retirement with Health Savings and Side Income
The first tip we have is to start a Health Savings Account (HSA). An HSA is a tax-advantaged savings account that allows you to set aside pre-tax money to cover qualified medical expenses. It can also be a powerful retirement tool if used strategically.
Contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are tax-free. After age 65, withdrawals for non-medical expenses are treated similarly to those from a traditional IRA, subject only to income tax.
Consider investing the funds within your HSA in assets like stocks, bonds, or mutual funds. Over time, your investments can grow and potentially provide a significant additional retirement nest egg.
Healthcare expenses tend to rise in retirement, so having an HSA can help you cover these costs without depleting your other retirement funds.
Our second tip is to consider a side hustle with passive income. Passive income streams require an initial investment of time, effort, or money, but once set up, they can continue to generate income with minimal ongoing involvement.
If you own real estate, renting out properties can generate a steady stream of income. Invest in stocks that pay dividends regularly. Reinvesting these dividends can accelerate your wealth accumulation. If you have expertise in a certain area, you can create digital products and sell them online.
Remember that the key to preparing for retirement is consistent saving, smart investing, and adapting your strategy as your circumstances change. It’s also a good idea to consult with a financial advisor to tailor a plan that suits your individual goals and risk tolerance.
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