You could also lower expenses, like trimming your current entertainment budget, cutting back on non-essential items, and waiving expensive vacations.
A lack of retirement funds isn’t an easy burden to bear. In fact, it’s almost always a nagging problem that sits in the background, stealing from our present joy. For some, this has been put off because of financial hardship, spending too much, or putting all your efforts into your other financial responsibilities.
Now, before your 50s roll around, you might need to save between 10 – 15% of your income. If you’re in your 50s, however, it’s likely that you will need to save more than 20% of your income, depending on your retirement goals.
Thankfully, it is never too late to either begin saving for your future or to find new ways to more aggressively grow what you’ve recently started. We’ve narrowed down insightful tips which will assist those of us in our 40s and 50s (or any age) to start saving for our future.
Compound the interest
Compound interest is the ability of your assets to generate earnings, which are reinvested to generate their own earnings. Once you have compound interest working in your favour, getting a late start won’t seem daunting.
Stash the extra cash
If you are lucky enough to be the recipient of an annual raise, consider putting all or most of this extra cash into your retirement savings. Seeing as you didn’t have that extra income to begin with, you probably won't miss it. To avoid the temptation of keeping any of that new cash, set up a debit order.
Stretch the goal
Planning to work longer is the easiest ways to extend your retirement savings. By working longer you will give your money more time to grow. This way you can watch your nest egg to develop into a fully grown golden goose.
Chop the expenses
This is the time during which you need to maximise your savings. The best way to do this is to aggressively reduce your debt, especially high-interest revolving credit, like credit cards. If you would like to accomplish this sooner, then a consolidation loan could help you manage your debt and give you the benefit of lower interest rates.
Retirement spending plans
People are capable of living on a lot less than they think they can. All it takes is some planning. While we’re all capable of living on less, we’re not all capable of doing the actual planning. This is where a financial consultant could step in and help you work out how to spend less after you retire so that you have a more realistic end goal.
Assess your home
If you consider your home, it may be possible that you need downsize your living situation to a smaller, more affordable property. You could consider moving to a less expensive neighbourhood or city, which might free up some financial space for bigger savings. And if your house is already paid for? Well, it could still be too expensive to maintain and that extra money would be better put if you funneled it into your savings.
At the end of the day, if your savings are behind schedule, you shouldn’t become demotivated. Instead, start fresh now and play catch-up with these tips. While it will most likely be difficult at first, it will provide great satisfaction. Not only that, but you’ll benefit greatly from peace of mind, knowing that you are doing your best to plan ahead. As an insurance company with over 30 years’ worth of experience, we can tell you that ‘peace of mind’ is not just a saying. It’s a reality that not many people get to live in, worsened by the fact that oftentimes life takes a wrong turn in the form of a car accident, a plumbing disaster, or even disablement.
While you’re on the road to ensuring a financially sound future, don’t forget to look after your present. Make sure that you speak to us about our extensive range of insurance products, including vehicle insurance, home and buildings insurance, and life insurance.