Despite the fact that some people in the UK won’t expect to retire until they are 68 under the government’s new changes, your retirement is something that you should be thinking about from quite a young age. Even in your 20s you should be considering your plans and beginning to save money in order to have access to the funds you’ll live on when you’re much older.
So, by the time you reach the age of 50 you should have managed a considerable amount.
The younger years – a recap
In your 20s you ought to have focused on writing off any debts that may have built up, such as overdrafts, credit card debts and any student loans you may have.
By your 30s you may need to divert your financial attention to saving towards buying a house or raising a family, but you should also look at reassessing your progress with your debts and joining your company’s pension scheme. You may also want to begin thinking about long-term investments that you could make.
Your 40s will all be about saving on your own terms, so opening an ISA or a savings account will be essential. If you receive any pay rises or bonuses, you should begin to contribute slightly more to your pension or savings pot.
In your 50s
Once you reach the 50 year milestone you won’t be such a long way off from retirement. It can make sense to pay some mind to your chosen retirement age, depending on whether you would like to defer your state pension or take it as soon as you reach State Pension Age (SPA). You can use this age as a guide for your savings from then on, as it’ll tell you how much more effort you need to put in to get the financials that you need.
– Take control of your investments
If you have control over where your pension (whether it’s a personal pension or works pension) is invested, begin to look at where your money is. You can always move it to safer options if you understand how this works – otherwise it can be best to get a professional to do this for you.
You might find that switching your personal pension to a SSIP (Self Invested Personal Pension) helps. This can give you much more control over where your investments are placed.
– Increase your contributions
Those that have the money should also ramp up their monthly savings to make sure they’re putting away as much money as possible in the time before their retirement. You really need to be sensible about this though, as the last thing you want to do is put away too much and be left without enough for today.
– Look at other investment options
If you feel that you haven’t managed to save enough and you would like to maximise your potential retirement earnings, think about the other investment options that are out there. Dividends, stocks, shares and other possibilities could be ideal.
– This about your future
You should also think about your immediate future when saving money. Moving into a care home could be a real possibility in older age, so you should try to save enough to cover the cost of care home fees.
Saving for your retirement can start to pay off in your 50s, as you will be getting closer and closer to your retirement. Make sure you save as much as possible during this decade so that you can reap the rewards later on.
This article was provided by Aurora Johnson on behalf of Cheselden, an NHS continuing care specialist.