Start Planning For Retirement Before It’s Too Late
“The secret of getting ahead is getting started”
Retirement is one of the inevitable realities of life and the sooner we realize and start planning for it, the better.
Although latest figures from the Australian Bureau of Statistics reveal more and more people are willing to extend the numbers of years that they want to work – with the national average increasing from 63 to 65 between 2007 to 2013 – only 53 percent of couples and 22 of percent singles were on the right track to achieve a comfortable savings target when they retire eventually.
Financial advisors around the world have set targets that people can follow, but the catch is people need to start working towards them as early as their 30s.
Each and household is different, and the amount of expenses they incur varies accordingly.
For the calculation of the amount of savings that you might require at the time of retirement, take an average of your monthly expenses and add a 10-percent overhead per month for unforeseen expenses.
Now you have a goal you can work towards achieving through different means like savings and investments.
Create a timeline with goals
Different financial organizations provide different timelines to streamline your retirement saving goals from as early as age 30.
The fundamental theme underlying all of them is the same: You have to have your yearly income saved by 30, three times that amount by 40 and so on.
This might seem unrealistic for some; however, it is not unachievable.
Still, if you’re not comfortable with the predetermined goals you can always set your own, as long as you follow them stubbornly.
Save whatever possible
You can start contributing and saving your income varying from 5-15 percent monthly depending on number of expenses you might have to pay during each period.
Once you’ve done the calculations for your average monthly expenses, there are some options like investments that allow you to make substantial contributions towards your retirement goals.
Familiarize yourself with pension and retirement savings plans available to you.
You might need a little help here to determine the appropriate savings and pension plans depending on the line of work that you’re in.
Colleagues, relatives, financial advisors or sometimes an internet search might help you determine relevant retirement plans.
Don’t forget healthcare costs increase with age.
This is one of the most important aspects to consider while saving up for retirement. Old age comes with its own host of healthcare costs.
Your lifestyles today might have a significant impact on these costs, too, so not only is it financially wise to plan for retirement today, it also gives you a physical edge to bring down some healthcare expenses related to lifestyle choices like smoking and drinking alcohol in the future.
Consult a professional
Financial advisors and planners are abundantly available wherever you might need them. It is a healthy idea to visit one who you trust to have a clear picture and motivation about your retirement plans.
As a person full of life right now, retirement might not be the thing that’s on your mind, but it’s better to make plans today because a stitch in time saves nine!
This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider a Product Disclosure Statement.
Views and opinion disclaimer
The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice’s position and are not to be attributed to RI Advice.