Retirement is something most people look forward to, a time to relax and enjoy after having worked tirelessly for years at a back breaking job. However, this happy dream might come crashing down if your finances are not in order.
That’s why today we will be discussing 5 ways in which you can guarantee yourself a happy and worry free retirement once you finally decide to hang up your work boots!
1. Plan Well in Advance
Even if your retirement seems like a decade or two away, it is imperative that you start planning for it right now. True financial stability doesn’t come overnight and unless you are someone who is willing to risk their life savings on a hedge fund; saving early is the best way to ensure that you are in a comfortable financial situation come retirement. So, the very first step is to find out when you are retiring! For anyone living in the UK, you can check out your retirement date here. Now that you know your retirement date, it’s time to move on to step 2!
2. Identify Your Post Retirement Income Avenues
The first source of income for anyone would be their State Allocated Retirement Funds. Now while this is a reliable and steady source of income, the amount of money received is not really enough to sustain a comfortable lifestyle. In addition to the State Funds, almost every employer has their own private Pension Scheme which should prove to be a much more healthy revenue stream post retirement.
But it is important to not just depend on these retirement funds, investing money is just as important as saving money, something we shall discuss in even more detail in the following points.
3. Investing in Fast Growing Opportunities
While this may prove to be a bit harder for someone who is quite close to their retirement age, for the younger generation who are now in their 20s and 30s and just now kicking their professional carriers into high gear – this is the ideal time to invest in a wide variety of stocks and shares and increase your holding portfolio. Investing money is not just about picking one particular stock or company, it has more to do with keeping a close eye on the market situation and swooping in when the situation is right.
4. Start Maintaining a Regular Budget
The spending habits of millennials are often masked in their early years due to the constant cash flow of monthly paychecks. However if you are someone who lives paycheck to paycheck, now is the time to start considering your spending habits. It is not just spending habits that need to be curbed, retirement means living within your means and that requires following a strict budget at all times. It is best to get into the habit of budgeting early so that you can portion out money for your retirement funds right from the start.
5. Investing In a SIPP
If you are the sort of person who likes to always be on top of personal affairs, investing in a SIPP (self invested personal pension) might be something that appeals to you. Yes it is undoubtedly more risky than having a state or company run pension fund for your old age but investing in one means you get to directly handle how your savings get invested into the stock market, ventures or otherwise. While there certainly is a risk factor going into this, if you are level headed enough and diligently check up on your funds ever so often, you stand to gain a lot more money from a SIPP.
At the end of the day, retirement is supposed to be a time where you get to enjoy the fruits of your labour and with a little bit of planning and these 5 secrets by your side, you are guaranteed to make the most out of it!