Friday, July 30, 2021

Never Too Early To Start Planning for Retirement: 4 Tips To Get Started Today

Photo by Karolina Grabowska from Pexels

How much is really needed for retirement varies. For some experts, you will need around $1 million in savings, or 70-80% of your current income. However, this also depends on your lifestyle, expenses, and running costs. For many people going into retirement, it is not difficult to live off their pension and savings. 

However, for a growing percentage of younger workers, the thought of relying on their pension contributions after their last day at work can be overwhelming. In fact, with the rising house prices, less job security, the ongoing pandemic-related crisis, and reduced savings, many younger workers have started to think about what will happen as they go into retirement. 

Here are 4 tips to bring into your lifestyle today that can help you prepare to live your best life after your working life ends. 

Start a Budget

It is easy to think that you can manage your money and you don’t need to have a budget. However, when setting up a family budget you will immediately see where you have been going wrong for so long. A budget can help you visualize how much you are spending in rent, bills, and overhead costs. 

But more importantly, it can give you a clear picture of where you are spending too much for entertainment. Once you have decided on your budget, it will be easier to reduce expenses and always have something left to do with your bank account. 

Have an Emergency Fund

As you get older, your responsibilities will grow in number and importance. You might have a family to look after, a partner, aging parents, and your own medical expenses. All this can amount for substantial expenses which you might be able to manage for as long as you can foresee them. 

However, if one of these expenses take you by surprise, you might end up wasting the savings of a lifetime. An emergency fund can help you cope with whatever life throws at you - but for it to be effective, you need to start adding to it today!

Contribute to Your Savings Account

It is always too easy to spend what we earn, especially if there are no major costs we need to cover or look after. After all, what is money for is not to be enjoyed? However, a little sacrifice now can go a long way! Instead of spending the whole of your income, you should consider always setting aside around 20% of it to contribute to your savings account. You will be surprised about the amount you would have saved in just a few months!

Find Industry-Specific Strategies

Each industry is unique, and you should always consider what sets it apart from others. For example, a freelancer or entrepreneur, will need to diversify their portfolio and investment type to ensure there is enough left at the end of their career. However, some bodies have other pension schemes professionals can count for. For instance, if you have been serving in the New York City fire department (FDNY), you should also follow some best practices such as the ones you can find here: