Everyone looks forward to a retirement where they can relax, indulge in their hobbies and favorite pastimes, without the need to worry about getting up for work! In order to enjoy your retirement it is essential to plan for it now and build your retirement savings as quickly as possible.
The following methods will ensure you are comfortable in your retirement:
1. Review your current budget
In order to save more you must be able and willing to put more funds into your retirement accounts. The first step in this is to take a look at your current expenditure and where this can be adjusted to release more funds.
Automatic insurance renewal can inflate your annual premiums, unneeded or excessive phone contracts can drain your funds and even eating out regularly can limit you savings ability.
As part of your review, create a realistic budget which allows you to save for retirement and build an emergency fund whilst still enjoying your daily life.
2. Boost your current income
If the above exercise leaves you scratching your head, unable to locate the additional funds you need to create a retirement fund then you may need to consider earning more. You may be able to obtain a pay rise or work more hours in your current job, or you may need to look for a second job.
Alternatively you can start your own online business! A part time job can also be a useful tool after you have retired. It will boost your income and provide you with both mental and physical stimulation; something which is important for older people.
An important part of this is to check that you are obtaining all the benefits to which you are entitled; these can make a big difference to your lifestyle and savings capabilities.
3. Automation and vision
It is advisable to automate as many of your retirement savings contributions as possible. In some cases this will mean you do not even notice the money having gone; you will certainly not forget to make your monthly contribution!
In order to stick to this plan; particularly when funds are tight it is important to have visual aids in strategic places around your home and even your workplace. This will remind you of what you are saving for and ensure you stay committed.
4. Additional earnings
If you are lucky enough to get a pay rise, bonus or a small inheritance then you should invest this immediately. You do not need it to maintain your current standard of living!
Wherever possible you should seek to maximize your payments to your retirement accounts. The government sets yearly limits which can be invested tax free; if you can afford these then commit the money, you will benefit in the long term.
The stock market offers an opportunity to boost your retirement income significantly; it can also be a high risk strategy! It is essential to take professional advice and study the market before investing anything; you need to be certain you know what you are doing. The closer you are to retirement and the more funds you need to build the more risky the approach will need to be.
Alternatively if you already have a reasonable fund built up you can use this to purchase shares in companies which have a history of paying dividends. A yearly dividend can add a considerable sum to your income in retirement.
- Another option is to purchase an annuity with the funds you have available; there are two main types of these:
The immediate annuity will pay you a lump sum and then a monthly payment for life.
- The deferred-income annuity does not provide a lump sum option, it will, however, give you a larger lump sum every month for life, starting from a pre-determined age.
Whatever your situation there is a way to boost your retirement savings and your income in retirement; the important thing is to start now.
Don’t do it on your own if you’re not a financial expert, and look for assistance. An advisor will know exactly what to do to help you boost your retirement savings. With these simple but effective tips you’ll live the most comfortable life by the time you turn 60.
*This is a guest post by Maxwell Donovan and Synaptic.co.uk!