10 Things to Do Before Age 40 to Retire Comfortably

US News and World Report ^ | 21 Apr, 2016 | Maryalene LaPonsie

[MtnClimber]

You should check these items off your to-do list by 40 if you want to retire with enough money in the bank.

A worker turning 40 today has 25 years to prepare for retirement by age 65. This may seem like a long time, but in terms of retirement preparation, it represents a swiftly closing door.

Compound interest is most powerful when it has a longer term in which to work its magic, and workers who fail to practice good financial habits early in their career may find they run out of time to correct mistakes prior to leaving the workforce. That doesn't mean you can't still retire comfortably if you start preparing later in life, says Rande Spiegelman, vice president of financial planning for the Schwab Center for Financial Research. However, those who start younger have an easier path before them. "If you start [retirement planning] right out of college, you could set it and forget it," Spiegelman says. "The longer you wait, the tougher it is."

To avoid making your savings situation any more difficult than necessary, finance experts say you should do the following 10 things prior to blowing out the candles on your 40th birthday cake.

[sheana]

Well we have a Mercedes.....and a Jaguar. But we didn’t go to the lot and pay an exhorbitant price for a new one. We found them about 1 yr old, low mileage, and almost half price of new. We paid less for both cars than my cousin did for their new Toyota.
I’ve always shopped that way so have super nice stuff at the same price everyone else pays for normal stuff. I do the same thing for clothing. I wear top of the line stuff I buy off the clearance racks at Nordstrms, Saks,etc. most of my tops were originally marked around $100 but I usually pay around $10 for them you don’t have to spend alot of money to live well.

[Yaelle]

I resemble that remark as well...

[Yaelle]

I did read Rich Dad Poor Dad but I couldn’t figure out how to do those genius things he did. It’s harder when you’ve spent 20 years having kids and didn’t plan for rough times....

[ameribbean expat]

Good point.

[Sicon]

Count yourself lucky. My 401k's YTD returns are -2.01% and -4.30%.

I'd do better in a savings account at 0.6%.

[wally_bert]

As a white male, good luck getting the first gov-co job nowadays.

[wally_bert]

And pondering about converting to Islam. A two-fer.

[patriot08]

.

Sneak across the border then come back as an illegal?

.
(That is if the Mexicans don’t shot you. Try reading their immigration policy)

[pine tree lover]

The rule of 7 is all you need to know. 7percent over 7years Nd your money doubles

[SamAdams76]

Ten percent over 7 years.

[roadcat]

I’ve always shopped that way so have super nice stuff at the same price everyone else pays for normal stuff.

Congrats! You sound like my wife. She loves bargain shopping, and never buys full price. All our furnishings were bought on sale or deep discount. And not cheap stuff, but real nice stuff, all were bought on sale. I hate seeing my friends want something and not try to bargain but just hand their wallet over. Crazy! And they are the ones who retired poor.

[sheana]

Your wife sounds like a smart lady. ;)

[aMorePerfectUnion]

"but I couldn’t figure out how to do those genius things he did." You can and you don't need to do genius things. You need to find one thing you understand that produces cash flow. Do that. "It’s harder when you’ve spent 20 years having kids and didn’t plan for rough times.... I understand. I could give you my own list. I'm doing it.

[Sicon]

Find me anyone who has seen a return of 7% for the past 7 years, or who has any realistic expectation of seeing it over the next 7...