The earlier you commence planning your retirement, the better your financial life would be when you are no longer in service.......CONTINUE READING THE ARTICLE FROM THE SOURCE>>>>>
In fact, planning it ahead of time will help you to set your priorities right especially in your spending habit.
Retirement can occur at anytime even though many people associate it with old age and as such do not consider it in their plans which ought not to be so.
Besides, it is crucial for every sensible individual to mull over it and try as much as possible to set financial goals that are attainable by creating a budget.
Having a retirement budget will help you to track your expenses, have a grip on your income and also see the need to enhance your finances.
Remember, spending money during retirement is a big challenge as most retirees appear to have little earnings outside their savings, particularly those who did not prepare or plan for it.
That is why it is very important to set your preference appropriately as it will assist you to manage your earnings wisely by avoiding extravagant lifestyle that may ruin your retirement plan.
It is quite true that having a retirement budget in this unfavourable economy can be a herculean task owing to the depreciating value of the Naira coupled with high inflation that has persistently posed a big threat to the survival of the common folks.
As a matter of fact, whether you like it or not, each passing day that you are working is a day closer to your retirement, no matter how far away it may seem at present. And if you appreciate your self-esteem and actually desire to walk tall after retirement, there is need to take a decisive step that will positively influence your finances and well-being.
Do you know that with proper planning and financial prudence, regardless of your earnings, life can be meaningful after retirement especially when you take charge of your financial future?
Depending only on your monthly pension or stipends for survival after retirement, cannot give you a worthwhile life because at times, the money does not come regularly or as at and when due. Hence, the need to start planning your retirement by setting aside certain amount of money for savings after taking in to cognizance your expenses for the month.
Having multiple streams of income besides your pension will also help you greatly.
The under-listed tips will assist you to see the need to take charge of your financial future:
Invest Early
Try as much as possible to start investing early as it would help you to generate a good amount of measure, compared to a person who starts investing later. Therefore, postponement in retirement planning will lead to loss of time and money.
Set Your Priorities Right
There is a natural tendency to increase your expenses as your earnings rises.
Surely, you should treat yourself when you get a big raise in your salary or promotion but with caution.
You should not allow the increase in your salary to get over your head by not setting your priorities right. Try as much as you can to avoid impulse buying and ensure you increase your savings.
Have A Savings Goal
If you have not started saving, you need to commence now, whether for retirement or another goal.
More so, saving is a rewarding habit and you can start small, thereafter, increase it. It is important, you make saving for retirement a priority for your own good and try as much as possible to develop a plan, stick to it, and set goals. Remember, it’s never too early or too late to start saving.
Do Not Tamper With Your Retirement Savings
If you withdraw your retirement savings now, you will lose principal and interest and you may lose other benefits or have to pay withdrawal penalties.
If you change jobs, leave your savings invested in your current retirement plan, or roll them over to your new employer’s plan.
Inflation
With persistent rise in the inflationary trend, which makes one apprehensive, you need to take into account inflation while calculating your retirement funds as well as your expenses.
Medical Emergencies
Old age usually brings medical problems and increased healthcare expenses.
That is why living out your retirement years in comfort while also covering your medical expenses may turn out to be a problem too large to bear – especially if your health (or that of your loved ones) starts to deteriorate. To prevent unforeseen illness from wiping out your retirement savings, you may want to consider taking insurance policy, such as medical and long-term care insurance to finance any health care related issue that may arise.
Understand Basic Investment Principles
How you save can be as important as how much you have.
Also, Inflation and the type of investments you make will play important roles in how much you will have saved at retirement.
Know how your savings or pension plan is invested. Learn about your plan’s investment options and ask questions.
Ensure you put your savings in different types of investments. By diversifying this way, you are more likely to reduce risk and make more money.
Be Prudent
You must learn not to be extravagant in spending your money.
Managing your resources will help you not to run helter-skelter to people for financial assistance.
Besides, it will help you to maintain a steady flow of income.
Define Your Vision And Goals
When it comes to retirement, everyone has diverse visions, goals, and priorities.
Achieving all these; means that your personal retirement income strategy begins with you, defining your vision and that of your future.
However, in defining your personal vision, you need to list your retirement plans, goals and prioritise them as this will enable you envisage how your personal lifestyle may affect your income needs in retirement.
Mind you, retirement is expensive if you are going to maintain your standard of living when you stop working.
Be Fully Involved In Your Employer’s Retirement Plan
Find out about your employer’s retirement plan and make sure you are fully involved in the plan. For example, how much would you need to contribute to get the full employer’s contribution and how long would you need to remain in the plan to get the money you contributed?
Remember also, that automatic deductions would be made from your monthly salary if you agree to your employer’s retirement plan.
Understand Your Employer’s Pension Plan
You must understand how your employer’s pension plan works by requesting for an individual benefit statement to see what your benefit is worth.
Again, before you change jobs, find out what will happen to your pension benefit. Learn what benefits you may have from a previous employer.
Expand Your Financial Horizon
You can open your own retirement account by setting aside a certain percentage of money every month. You can contribute even more by expanding your coast.
You can also start with much less according to your ability but maintaining an individual retirement account requires self-discipline, focus and determination.
