3 Ways to Help Start Financial Planning for Retirement
Retirement can hit you faster than you know it. With the years flying by and everyone saving for their kids’ futures, paying off their credit card debts, paying of mortgages on homes, car loans, student debts and more, they often forget to put aside money for their golden years. You may take the necessary precautions for some aspects of your future by purchasing protection like UAE insurance for your home and car; but why not start putting away the pennies for your golden years as well!
We all work hard and eventually will reach a point where you cannot any more or are transitioned into retirement by your company. Employer or government pension plans may be a part of the plan; but rarely if ever are they enough to sustain a life and living style many of us become accustomed to. Saving and planning for your financial future post retirement is a step that experts suggest beginning as soon as you start earning a regular income. It is up to you to start taking the steps to ensure that you have a happy and comfortable life post retirement. Talking to a trusted financial advisor is always a good idea and you can also look at some measures you can start off with till you do so.
Let us take a look –
- Create a realistic budget – To even think of a sound financial future you have to first have a proper budget in place. Create a detailed assessment of your expenses, income and investments. Putting money toward any kind of financial saving is negated if you aren’t able to figure out how to take care of other present necessary expenses first.
- Start as early as possible – You may have just started off on your first job and are young and carefree and odds are retirement feels like a prospect far, far into the future. However, it is never too soon to put your financial planning into place. If you start with even small amounts now, the interest you will earn over time and its cumulative effect will help you collect toward a sizeable nest egg. Besides, it is easier to take risks with your investing when you are younger and if dabbling in riskier market instruments like stocks, with potentially higher reward appeals to you, then now is the time to do it.
If you are fast approaching retirement age then rather than fretting over waiting too long, start as soon as possible. Whatever you save and start earning interest on could greatly help with post retirement expenses. A high interest savings account is or a fixed deposit are a couple of the ways you could begin investing your money into. Consider a diversified portfolio to spread risk.
- Have a fixed savings plan – It is easy to divert funds on more immediate wants or needs when you aren’t really thinking of retirement yet. Therefore, when you sit to do your budgetary and personal finance planning, set aside a fixed amount you know you can comfortably put aside towards a retirement fund. Treat that money as you would any necessary expense. One option to make sure you do follow the practice is to fix up a direct debit system from your savings or current account wherein a certain amount is transferred to your retirement savings every month. You could then eventually change the amount as per the way your income changes. You can also contribute towards your employer offered retirement or pension plans like the 401k for example, which is mandatory in some cases and depends on how long you work for the company.
Plan now for a comfortable future ahead.
Shanaya Mark is an MBA student, training to be a certified financial advisor. She also loves to write about all things finance ranging from UAE insurance to home purchase savings. She hopes to one day start her own consultancy.