Planning for your future retirement

In the unlikely event that you think about financing your retirement when you’re starting in the world of work, you may think that time is so far away that such matters can be put off to a later date. However, because life expectancy continues to increase chances are you will reach retirement age and require a decent sized pension pot and that should be thought about as early as possible in your working life.

So when is the best time to start saving?

As fewer and fewer employers offer a work pension, it is well worth getting organized and starting a retirement plan as soon as possible. You will then give yourself the opportunity to build up a substantial pot of money while you work your way through your career.

Seek advice early on

If it isn’t one of your strengths, finance can be a tricky business to wrap your head around, so it can be a major benefit to take advice from a professional and do online research on various savings options.

You need to determine what kind of investor you are. You may prefer to stick to low risk investments where the returns on your money are not particularly high, but guaranteed and safe for the most part. Alternatively you could build a portfolio that mixes low, medium and high-risk investments, so if something high risk went wrong you would have a secure fallback position. Fisher Investments is a highly successful company that specializes in investment advice. The experts at Fisher Investments help savers with these and many other decisions and plan a portfolio that works for them.

If you don’t mind a bit of a gamble, then high-risk investments have the potential to pay off very well. However, do seek advice, do your research, and read articles such as 99 Tips from Ken Fisher to help you with planning. Fisher is a specialist in retirement investments and can help you plan your finances for a stable future.

Save when you can and as much as you can

There are always things to spend your money on instead of saving, and it is perfectly reasonable to want to pay off college debt, or save for a wedding, a home or a new car. With demands like these on your money, the best way to manage your retirement savings is to draw up a budget and put as much as you can comfortably afford into a plan. Money you invest when you’re in your early 20s means that time is on your side, with some 40 years or more of compound interest and gains in the market.

Unlike many older people, many younger people understand that it’s up to them to save for a pension. Even if you didn’t start earlier in life, you may find that you have more disposable income available in your 30s, and you can put some of it into your nest egg.

Work pensions

If you have been enrolled in a pension plan that your employer contributes towards, or has contributed to, you have essentially been getting money for nothing, provided you have maintained your own contributions at the appropriate matched level. Many employers have frozen these types of pensions, so even though you will still get the benefits you’ve earned, you are unlikely to earn future benefits under the scheme. This is one of the reasons why it is worth developing your own individual retirement plan to add additional value to what you will receive from your workplace pension.

Home ownership

Much has been written over the past few years about the problem with home ownership, sub-prime mortgages and the like. However, if you’re sensible about what you can afford when you buy, then owning a home before you reach retirement can be a major benefit. If you own your home outright, you have a significant asset, especially if you have upsized over the years while your career has developed and you have been earning more. It also means your pension doesn’t have to go towards paying a mortgage or rent. 

Retirement time

If you have put away enough to retire by the time you planned to, then you are in the perfect place to begin your retirement. If you haven’t, you may need to put it off until you make steps to secure your financial stability.

Saving for retirement means that you need to think ahead to provide not only for yourself but also for your family. Sound planning with good professional advice can give you a secure and pleasant next phase of your life.