Retirement may seem worlds away but in reality, the older one gets the faster time seems to fly by. And, before we know it we’re 65 and it’s time to retire. Will there be enough to sustain us through retirement? Will we be able to cover daily, weekly, and monthly costs? How will we cope? If you weren’t lucky enough to get started on retirement savings from an early age, you need to know that there is still hope.
Check out these seven lifesaving tips to help you save for the day you retire, even if you started late:
Time to Catch Up
If by the age of 40 you have no retirement savings then here’s a basic calculation for how much you will need for retirement. If you can save £17 000 per year then you will have saved around £1million in 24 years. To put it bluntly, if you have nothing saved for retirement by the age of 40 then you will need to put every little bit extra that you have into a retirement policy. Today more and more retirees are opting to work to age 71 to give their retirement savings a boost.
Know how much you need
If you’re thinking that you don’t need a million in the bank, we’re here to tell you that even the most simple retirement life will require you to have anywhere upwards of a million in the bank. Most experts will tell you that it is not a good idea to withdraw more than 5 per cent of your retirement funds each year. And with no new money coming in, that million will go pretty quickly.
Today people are being pushed into taking additional investment risks to make up for time lost on saving. While the chance of investment growth is doubled or tripled that of a retirement policy, there is a reason it is called risk. You could lose everything.
Get Sufficient Insurance
A loss is one of the biggest reasons why so many people declare bankruptcy. You need to make sure that you are adequately covered for the risks in your life. You need to make sure that you have proper insurance for health and disability. Make sure you have enough car insurance. If you have children you need to know that they will rely on you for stability and if you are unable to work due to loss then you are unable to provide for them.
Get rid of debt
The easiest way to ensure you are saving for retirement is to free up as much money as possible. The more money you have to pay into your retire policy the better. Pay off credit cards as soon as possible. Pay extra money in your house bond or mortgage. If your mortgage payments are applied toward interest it will be in your best interest to add a few extra payments whenever possible.
It’s time to say no to helping everyone out. It’s time to focus on saving for your retirement. Now is the time to say “my family first”. There are other options for those wanting financial assistance. Children going to college have the ability to apply for student loans. Your children will also have their whole lives ahead of them; you only have a few years to save for retirement. After all, you do not want to be a financial burden to your children when you retire.