When you’re young, retirement seems far away – too far away, in fact. It may just be something you fantasize about each morning when your sleep is rudely interrupted by your blaring alarm.
You might still have decades left in the workforce before you can think about laying back and enjoying more than a few weeks off at a time. But although the hours in the office might crawl by, the years will come and go in the blink of an eye and before you know it, you’re ten years away from retirement!
You might have dreams of retiring at 50 and spending endless hours on the beach without a care in the world, but do you have a plan to turn that dream into a reality? Most people will meticulously plan out their annual two-week family vacations but haphazardly plan for their retirement that will hopefully span decades. This is mainly because it is easy to get caught up in the everyday busyness of life and procrastinate planning for a stage that seems so far away – or it may just seem overwhelming.
The stark truth remains – how your retirement adventure unfolds is greatly determined by the financial decisions you make starting now. Before becoming overwhelmed by the factors beyond your control like how many years you will live or future incidents, start with a careful plan, which is the best you can do to make your future as predictable as possible. Here are some strategies you can put in place NOW towards a stress-free retirement:
Envision your retirement days
Before making financial projections or creating a financial plan, it is necessary to envision what your retirement phase will be like. Does that vision include traveling to new places? Perhaps living near or having a second home close to your children or other family members? Or picking up a new and possibly expensive hobby? The point is that to plan for any goal, you need to clearly define that goal. Sure, your lifestyle will change, your plan will evolve, and you will adapt, but before you start planning for the future, you need to know where you are going.
Make your nest egg comfortable
No one wants to be stressed during their retirement years, so it is important to accumulate enough to comfortably go through this phase. To achieve this, assess your spending habits and create a budget. Once you have an idea of where your money is going and where you can potentially cut back, draw up a budget. This will help you to understand how much of your income needs to go to fixed expenses and how much is left to save and invest.
If you are already close to retirement and have not saved enough, do not fret. It is possible to catch up, however, it will take effort and expert guidance from a Wealth Manager that understands your personal and lifestyle goals.
Understand the options available to you
Now is the time to make your money work hard for you, by investing in asset classes that enable you to grow your wealth. With your savings, you can invest in bonds, treasury bills, commercial papers, stocks or fixed assets like gold and real estate.
There are different products available to suit different goals and the last thing you want is to make an uninformed decision and take unnecessary risk. This underscores the importance of seeking the expertise of a professional wealth manager to understand what is right for you.
Consider your lifestyle
Too often, the word ‘retirement’ is only tied to finances, rather than to the life you hope to lead when you retire. A truly successful retirement phase is hinged on one’s ability to bring both wealth and lifestyle issues together in harmony. Sadly, for some people, this harmony is never achieved. You could have millions saved, but if you don’t know what you want to do or are too conservative about spending the nest egg you worked so hard to build, you may not enjoy your retirement to its fullest. Having both your “financial portfolio” and “life portfolio” may allow you to achieve true happiness in retirement and focus on what really matters to you.
Remember the cost of delay
Whether you are 35 or 55, it’s never too late to start planning for retirement – however, the sooner the better. Each month that you put off investing in favour of spending pushes out the date at which you’ll reach your goal. The bottom line is – do not procrastinate!
While retirement planning is not complex, it is nuanced and involves a lot of variables that require the attention of a professional. Ultimately, the path to retirement is a journey and the burdens of this journey can be eased with the support of professional wealth managers on the digital and lifestyle investment platform, M36, who understand that aligning your financial and lifestyle goals is essential to achieving retirement bliss.