Planning for retirement can start as early as the time you receive your first pay check but it’s not unusual to find people who only pay attention to it a decade or two before retirement hits. Though results may not be as favourable as, say planning in your 20s, it is never too late to save up for a comfortable life in your golden years. It will be more challenging for sure and the risks are naturally higher, but absolutely not impossible to achieve especially if you have a good financial planner to guide you.
Here are some of the best recommendations for late starters:
- Make decent projections. Determine how much you will need as well as how much debt you still have to pay during your retirement years. Aside from basic needs, include a column for recreation and another for life’s surprises (yes, people get ill especially when they get older). The list will serve as your guide in planning for savings and investments. You don’t have to be very detailed about it; a good estimate will do.
- Eliminate or minimise debts. Debts, particularly major ones, can have a huge impact on your retirement plans. Paying more than the minimum amount or using windfall to pay off debt will not only let you finish debts early, it also means saving on interests.
- Reduce your spending. They say if you can’t increase your earnings, the best alternative is to cut back on spending. In the years leading to retirement, do both if possible. Review your current budget and find out where you can still save and which items you can get rid of. Let go of luxury items, relocate and/or downsize especially if these are preventing you from improving your savings.
- Take risks. Inflation can easily hurt your retirement funds. So, invest a percentage of your money to protect from inflammation while making profits. However, be careful when doing so. Do your research and heed the advice of experts or a trusted financial planner. Remember not to put all eggs in one basket.
- Start now. Time is not exactly on your side so you need to be more aggressive on saving and investing. Start today.