Basics Of Financial Planning For Retirement
Planning for a richer retirement is not that hard if you start early.
Financial planning may not be the most exciting of conversation topics but it has a lot of advantages. In particular, when it comes to retirement, some careful financial planning over the years can ensure that you’re comfortable and have enough to enjoy your life. The reality is that millions of people retire every year without enough to live comfortably – make sure that you’re not getting caught out.
Planning for retirement in your 20s
It might sound like madness to be thinking about retirement when you’ve only just graduated but now is actually the perfect time. Objectives such as paying off loans and opening tax-efficient savings accounts can help to lay a positive foundation for ensuring that you have cash to fund retirement plans. Start contributing to your work pension, even if it’s only the minimum amount. If you begin making contributions now you will adjust your available income so that making monthly payments becomes a positive habit.
Planning for retirement in your 30s
If you haven’t yet joined a pension scheme then now is the time to do it. Most employers must now offer a workplace pension scheme and if you’re freelance it’s worth setting up a private pension plan of your own. The 30s are the ideal decade to start re-evaluating your finances with retirement in mind. Clearing any remaining debts, especially those with high interest rates like loans for those with bad credit scores, will allow you to start optimising the income that you have, from purchasing a home to making some smart investments that will deliver sizeable returns.
Planning for retirement in your 40s
For many people, the 40s are the decade when employment income starts peaking. That means that you should have enough disposable income to start paying extra into a pension pot. If you don’t yet have any savings then this is the decade in which to start planning to do it. If you do have savings, start looking at how much more you could add to them and whether the options you have are tax efficient.
Saving for retirement in your 50s
In the average home the kids have now flown the nest and there could be a substantial amount of equity built up in a property. That means that any spare income can now be dedicated to ensuring that there is enough retirement finance available. Maximise the contributions that are being made to a pension and look into other ways to make the most of your cash. Many people choose to start investing at this stage looking for a swift uplift in existing resources – but remember that you should never use money to invest that you can’t afford to lose.
Saving for retirement in your 60s
At the start of your 60s it’s a great idea to speak to an independent financial adviser. With retirement on the horizon there are decisions such as whether to draw down or buy an immediate annuity to be made – and if there is any debt left to deal with you want to do this as swiftly as possible. If you can keep working it’s often a good idea to do so – the extra years of income could make a significant contribution to ensuring the retirement you want to have.