Start Planning for Retirement Today!
Everyone talks of what they will do once they retire. Nice cosy place by the beach? Travel the world? Buy that car you always wanted? The reality is a lot less glamorous. More than half the population that is retired struggles to get by due to the fact that they haven't saved enough. One should consider that in Europe the life expectancy is a 100 in first world countries. With medical advancements and a world-wide drive to live a healthier life this figure could become a reality anywhere in the world in the future. So if you are planning on retiring at the age of 55, 60 or 65 then you could have up to 40 years of you which will be living off your savings with no income. Are you prepared for that?
If you have just begun your career and started getting paid a decent salary, retirement probably feels like it's lightyears away. But it will get here quicker than you expect, and when it does, you'll want to be prepared.
And if you are in your 40s or 50s and haven't started saving for retirement yet, it's not too late. The most important thing is to start planning as soon as possible.
Create a Budget
Take a look at your spending habits, including what you spend on necessities like rent or mortgage, food, and transportation. This will give you a rough idea of what you'll need every month when you're retired. Keep in mind that inflation and your cost of living will likely change once you hit retirement age.
Determine Your Income Streams
Make a note of the income sources you expect to receive when you retire. This can be anything from the pensions you are contributing to at work to social security payments, stocks, fixed income bonds, or other investments. By combining your estimated income with your average expenses, you will have a better idea of what you'll need to save prior to retiring.
Pay Your Debts
Interest can quickly eat away at your retirement savings. If you have significant debts, try to pay them off before you retire. You'll increase the available funds you have every month.
Don't Forget Healthcare
Maybe you are not covered for all healthcare-related expenses, so factor in the cost of a supplemental plan when creating your retirement budget. Like your cost of living, your medical expenses will likely change as you get older. You may also want to consider purchasing long-term care insurance, which can help offset the cost of a nursing home or assisted living should you need it.
Checking in on your investment accounts regularly is important. It lets you review the markets and analyse your portfolio to see if there are opportunities to potentially increase returns or minimise losses. But you'll never know where you stand if you don't keep on top of your accounts. If you're not sure where your portfolio stands, expatwealthatwork can help you review your investment portfolio and give you personalised recommendations based on your retirement needs and goals.
As you get closer to retirement, think about where you want to live. Downsizing your home can help reduce living expenses, but location plays a large role in housing costs too. Some countries are more retiree-friendly than others, and you may want to consider relocating to somewhere where your money will go further.
When you're ready to retire, having a plan in place will help ease the transition to life after work.