A lot of what I write about in my blog focuses mainly on the here and now. However, sometimes we have to think about the future. Getting old is something that will happen to us all. It can be a daunting process, and many people don’t take the time to consider how to prepare for it. This is one of the biggest mistakes a person can make. If you make enough preparations, you can make sure that your retirement and beyond are some of the best years of your life.
If you haven’t started to think about how you can provide for yourself (and your partner if need be) when you retire, it is time to begin. Here are some of my top tips to make sure you have a comfortable retirement pot to be able to enjoy it.
Start to think about your pension
Nothing is more important than making sure you start saving for your pension as soon as you possibly can. Some people think that saving for your pension in your twenties is too early, but trust me when I say that it is never too early. The younger you start saving, the more time your money has to mature. Plus, if you save more when you are younger and have fewer responsibilities, you will compensate for the times when you can’t save as much. For instance, when you have kids or buy a house, you will have to spend a lot more of your salary on those things.
Your pension will more than likely be the main source of your income when you are older. To save enough to make sure you can do all the things you want to, it is good to think about your budget. What kind of monthly allowance will you need your pension to give you so that you can enjoy your life? When you know this figure, think about what age you want to retire at. You then need to take a guess at multiplying your needs by the amount of time you will be retired for.
Buying a house
When you retire, the last thing you want is to be paying rent to live in your house. Ideally you will be able to buy a house, so that when you are older you have a place to live that costs nothing. If you can pay off the cost of a mortgage during your working life, you won’t have to take care of this when you are no longer working. Furthermore, it is always better to be paying towards your own house, than paying rent to someone else. Property can also be a great form of investment. Read more about this in the next section.
Invest your money
There are many sorts of investments you can look into to help you in your retirement.
- When you buy shares you invest money into a company for a stake of the business in return. The trick is knowing what to invest in. If you can purchase shares at a low price, when the company grows, so too will your shares. The way to make a profit is to sell your shares for more than you bought them for.
- Many people purchase properties to rent out to tenants. This is perfect for making sure you have a little extra income coming in when you retire. When you buy the house, you can make sure that the rent you get back in return covers all the costs of the house. And so when the mortgage has been paid off, you will only be receiving an income.
- Many banks will offer you a savings account where you can keep your money. Be sure to shop around and find the best interest rates available.
- There are other sorts of alternative investments too. Think about investing in things like art, wine and precious metals.
One thing to be cautious of is that with any investment there will always be an element of risk. Make sure you have researched the risks and know what you are getting into before investing.
Consider health care
You never know what will happen to you in the future, or how you health will be. You may have to move into a nursing home to get the full care you need. Nursing homes are great places to be, if you aren’t able to look after yourself fully. With round-the-clock help from medical staff, you will be in the best of hands. Therefore, you need to factor in saving for any costs for things like these. Of course, it is impossible to predict what might happen, but think of it as saving for a rainy day.
Think about the things you want to do
When you come to retire, it is guaranteed that you will want to enjoy your retirement. Maybe you already have a long list of all the things you want to do. Or maybe you haven’t even started to think about it. It is good to consider the things you want to do in the future. Do you want to go travelling the world? Or perhaps you have your eye on a course that you always wanted to do. Make a comprehensive list of all the things you want to do in your retirement and figure out how much they will cost. When you have the costings for these things you can start to think about budgeting for them and begin saving.
Prepare for your funeral
This is a bit of a morbid one, but it is something that needs to be thought about regardless. People are often surprised by the amount a funeral can cost. The worst thing you want to do is to leave your family with an unexpected funeral bill. You can write instructions into your will regarding your funeral. This will help to direct your family once you are gone. They will be so grateful to you for having thought ahead at a time when they are dealing with the grief of loss.