You may feel as though it is far too early to start thinking about a retirement plan but in reality, if you want to maintain or even improve your living standards then you should be thinking about your retirement plan as soon as possible. You will find that the majority of people start paying into a pension when they start working and some even just rely on the social security you will receive when you get the right age. However, this just isn’t enough, especially if you have been living a fruitful life and you haven’t had to scrimp.
Building a realistic retirement plan is a wise choice for anyone to make no matter what your age. It’s never too late to think about saving towards this important and significant time in your life. You really don’t want to get to your retirement and discover you haven’t put away enough to have the retirement that you deserve. You are most certainly not going to feel like returning to work to earn those extra pennies, that’s for sure. Lacking a plan is one of the main reasons people often fall short with their funds and in reality a plan should be a priority even as early as your 20’s.
Retirement is no doubt one of the biggest miles stones in someone life so it’s best to try and make the most of it and make it stress-free, just as it should be. You’ve certainly got enough time to put a plan in place so there should be no excuses.
If you still need convincing that your retirement plan is something you should have under wraps have a look at these simple these that you should be considered as part of your plan:
Are All Your Accounts Up To Date?
It’s becoming more and more common for people to have money in more than one place. Long gone are the days where people would put their saving under their mattress! Whether you have one account or your money dotted around it’s best to make sure you’re keeping track of each one on an individual basis. You will probably already know exactly where your regular bank account is at with funds, especially now that you can easily check them from home or on the move via your mobile phone. But, you should also make sure you know exactly where your social security account, any work placed pensions schemes, and private pensions schemes, and any other banks account or savings account are at. If you haven’t checked your accounts at least once a year you are making a mistake. It’s not difficult to monitor and see where you are heading for future funds, and if you aren’t hitting the mark you are expecting for retirement this is your greatest tool and opportunity for making changes now.
How Much Will You Receive To Live Off?
This leads us to your income. You will all be aware of what your income is currently but do you ever consider looking at where your income could be in the future? When thinking about your retirement plan you should be factoring in how much you are going to be receiving, where it’s coming from and how often you will be getting it. It’s always advisable to make sure you keep emergency money for unforeseen circumstances so keeping a savings account could be a good addition to anyone’s plan. Or try withholding some funds until further into your retired life. A lot of pension websites or online calculators have a tool that allows you to see where exactly yours is at and how much income that will lead to. Often you will have an option to release a larger sum, to begin with, and then move onto regular payments however this can sometimes lead to a large portion of your funds being spent too quickly and you having to cut back on costs and who wants to do that as they get older?
Pay Off Debts Earlier rather Than Later
Of course, having things such as mortgage to pay means that you will have an element of debt that is typically longer than others. And, yes, it can be difficult to get debt free and love off of the money you receive each month however the sooner you can do this the better. You don’t want to be seeing a massive chunk of your weekly or yearly income from your savings for retirement being put towards paying debts, you want to see nothing but living costs and lifestyle costs. You do have the option of using that ‘lump sum’ we spoke about above to pay off your debts but in reality, if you’re going to do that wouldn’t you rather go on a long retirement trip? It’s not only an important idea now to know where you are with debt and try to keep in control but it becomes even more important when you are heading towards your retired years. Try putting a plan in place to be debt free at least a few years before you are due to retire, you’ll be surprised how much it helps.
Look At The Overall Picture.
So what is all this for? It’s simple really, this all means that when you are retiring and are going to be having that well-earnt break, any changes need to be relatively stress-free. Now is time to be looking at the overall picture and start to think about where you actually want to be and what you want to be doing when you retire. Do you want to still be independent and move to an assisted nursing home? Do you want to travel some more? Do you want to remain in your home? Do you want to be able to support the family financially? Whatever your aim you should make sure you think about the basics and have an idea of the age you want to plan your retirement for, what you want to do and how much you are comfortable living off.
These are just a few of the top tips for you to consider when building a retirement plan, do you have any others to share? Please add them to the comments section below.