“The question isn’t at what age I want to retire, it’s at what income.” ~George Foreman.
Saving early and often is probably the most powerful and sure way to achieve a comfortable retirement. Those who allow time and compounded returns to work for them are more likely to have adequate savings for retirement. Not having enough of a cushion for retirement is a daunting fear but there are strategies to help you overcome this problem.
The obvious solution is to save even more. Even a relatively modest increase in retirement savings can make a big difference when combined with other steps that postpone the time when that money is needed.
Educating yourself about financial issues is an absolute must for retirement planning and a major reason many people cannot save is because they simply do not understand how to manage money.
A simple and tested method is to automate savings after lowering spending. You can do this through measures such as check off system from your pay or standing orders. If you never see the money in the first place, there will be no temptation to spend it.
Spending and saving are just habits and new habits can be learned and formed that are just as satisfying and a lot more enriching. Examine your expenses closely. Little differences in spending today can make a big difference in your retirement savings tomorrow.
Review your finances and ensure that you spend less than you earn. Create a budget that includes regular retirement savings, and stick to it. Take full advantage of your company’s pension plan if they have one, if your employer does not have one then open an individual retirement account and start contributing immediately. A registered individual retirement plan will accord you income tax benefits that will help your savings grow even faster over time.
Invest Retirement Savings Wisely
Take advantage of the structure and benefits of registered pension schemes when investing for retirement. These include employer-sponsored pension schemes (also called occupational schemes) where membership is compulsory; or individual pension schemes, such as the Zimele Personal Pension Scheme, where membership is voluntary.
If you are young, take advantage of stock market growth and invest part of your retirement savings there. You don’t have to worry about doing it yourself as products such as the Zimele Personal Pension Plan will automatically do it for you. As you get closer to retirement, we recommend that you transfer your benefits to the Zimele Guaranteed Personal Pension Plan, which is free from stock market volatility and will secure your benefits while still providing steady growth. Upon retirement, we recommend the Zimele Income Drawdown Plan, where your cumulative savings will earn a monthly income indefinitely, without eating into your initial benefits.
Saving for retirement may seem unnecessary when we are young, but starting early means you will be able to save modest amounts over a very long period of time, rather than trying to catch up when you are too close to retirement. All it takes is a savings road map, good professional advice, an open mind and the ability to make some financial sacrifices along the way.
Getting serious about retirement planning certainly beats the alternative of facing retirement with no plan at all, and having to leave your dignity and welfare to dependents who might not have included you in their financial planning. Start preparing for your retirement by opening a Zimele Personal Pension Plan account today. Secure tomorrow today.
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