Many of us look forward to retirement: finally we’ll have a lot of spare time to pursue our hobbies, help out with family and younger generations, and relax a little after a long life working hard. But sadly many people in the retirement age find themselves working longer than they’d like, or struggling with money as they have not prepared properly for their retirement. A few small changes can make a big difference to your comfort as you get older, so please read on for my top 5 tips for preparing for your retirement.
1. Spend less than you earn
This is the biggest thing you’ll need to master during your years. Whether you’re 20 or 50, this is an important lesson. Debt, in the form of credit card debt, student loans, personal loans and mortgages can be completely unaffordable when you’re older and without work. That’s why it’s important to spend less than you earn as soon as possible, so there’s spare money left over to save.
2. Save and Enjoy Compounding Interest
Once you have your expenses well under your monthly income, you’ll have money left over to save. This is key. If you start out saving in your 20s, with the magic of compounding interest by the time you reach your 60s you may be impressed by how much money you’ve accumulated, potentially allowing yourself to retire sooner than you had planned!
3. Prepare For Your Funeral
No one wants to think about their funeral; after all it’s a bit of a depressing thought. However, if you don’t think of your funeral, it will mean your family will be lumped with more responsibilities and costs when your time does come. As such, it’s a great idea to invest the time and money into your funeral to show your family how much you care and to ensure they aren’t stuck with the burden when they’re trying to grieve. Headstone costs can very a lot, so be sure to shop around and find something within your budget!
4. Think Long Term for Investments
If you plan to invest in shares, stocks, or even property, it’s better to think of the investments as a long term thing. If you are looking in the short term and there’s a market variation, you may become concerned and sell at a big loss. As a general rule it’s good to buy and hold for as long as you can. But I’m not a financial expert, which brings us to point 5.
5. Consider Working With a Financial Planner
If you hope to retire, then you do need to do some financial planning. If you’re not confident about managing your finances or just want an expert opinion, a financial planner can provide a lot of relief and help you find a direction to ensure financial security. Be sure to shop around and find references.
With these 5 tips you’ll be more confident and more prepared for your retirement.