PLAYING CATCH UP WITH RETIREMENT SAVINGS
Quote of the Week: “The question isn't at what age I want to retire, it's at what income. ~George Foreman
Saving early and often is probably the most powerful and sure way to achieve a comfortable retirement. Those who allow time and compound interest to work for them are the most likely to amass adequate wealth without much effort. Not having enough of a cushion for retirement is a daunting fear but there are strategies to help you overcome that problem. The obvious solution is to save even more. Even a relatively modest increase in retirement savings can make a big difference when combined with other steps that postpone the time when that money is needed.
Come up with a plan to manage your finances towards retirement
Educating yourself about financial issues is an absolute must for retirement planning and a major reason many people cannot save is because they simply do not understand how to manage money. A simple and tested method is to increase savings automatically by lowering spending and increasing savings through measures such as check off system from your pay so that you never see the money in the first place. Spending is just a habit and new habits can be learnt and formed that are just as satisfying and a lot more enriching. Examine your expenses closely. Little differences in spending today can make a big difference in your retirement savings tomorrow.
Be prepared to cut back in order to save more for retirement
Review your finances and ensure that you can spend less than you earn. Create a budget that includes regular savings and stick to it. Take full advantage of your company’s pension plan if they have one, if your employer does not have one then open an individual retirement account and start contributing immediately.
Invest your retirement savings wisely
Take advantage of the structure and benefits of registered pension schemes when investing for retirement. These include employer-sponsored pension schemes (also called occupational schemes) where membership is compulsory; or individual pension schemes, such as the Zimele Personal Pension Scheme, where membership is voluntary. Contributing to registered pension schemes gives you access to professional services and tax benefits that are very difficult to replicate elsewhere. This will ensure that you end up with adequate retirement benefits without the hustle and bustle of regular tracking of financial markets and other forms of investments.
Saving for retirement after age 50 can be challenging but is quite achievable. All it takes is a savings road map, good professional advice, an open mind and the ability to make some financial sacrifices along the way. Whether you are just starting a career or your retirement nest egg is on track and you are planning for retirement, getting serious about retirement planning at age 50 is not optimal but it certainly beats the alternative of facing retirement with no plan at all. Start preparing for your retirement today.