Retirement planning can be a long process. It can allow you to lead a comfortable future as well as meet your post-retirement goals, such as pursuing an interesting hobby, exploring new cities, starting a new venture, and so on. Since it can be a crucial element of your life, you should plan it to the soonest. However, there can be times when you might be unable to begin your retirement planning due to financial responsibilities. Although planning your retirement last-minute might not be a wise solution, it can be achievable. In your last-minute retirement planning, don’t overlook valuable options like Nationwide mortgages for the over 65s. Therefore, let’s go through these top four tips that can help you ace your last-minute retirement planning:
- Save adequately
Retirement can be one of your long-term goals as a working individual. However, due to a rise in the financial duties, such as a child’s education or wedding, you might utilise your savings to look after their needs. If you have delayed your retirement planning to manage the financial requirements of your family, increase the savings rate at an older age.
As a last-minute planner, reduce your current expenses and funnel your savings towards retirement corpus. If you are above 50 years, opt for an Individual Retirement Account (IRA) that can provide you with catch-up provisions to contribute an additional source of income from IRA and 401 (K)s. For instance, if you can max out your IRA and 401 (k) contributions after crossing 50 years, you can keep aside approximately Rs. 2,500 on an annual basis.
- Invest early
After retirement, the flow of your professional income can stop. Therefore, it can be imperative to invest at a young age to build a retirement corpus for your financial well-being in the future. Although savings can allow you to meet your needs, investing early can ensure the accumulation of wealth for your future.
Since you might have ample time in your hands at a young age, you can reap the benefits of the power of compounding. Typically, compounding can allow you to earn interest on your investments. For instance, if you invest Rs. 5,000 in a retirement policy every month at the age of 30, you can build a retirement corpus up to Rs. 75,000 by the time you reach your retirement age as well as earn retirement income in return when the flow of professional income stops.
- Spend responsibly
Many of you might aim to live a lavish lifestyle after retirement. However, if run low on resources, you might have to cut down your expenses on unnecessary items to maximise your savings. When you reduce your expense, you can develop a financial discipline as well as spend responsibly.
For instance, let’s assume that you save approximately Rs. 2,97,14,000 and spend Rs. 3, 71,42,500 every year. If you avoid your investment gains during retirement and spend your savings at the current rate, your savings can last for the next 8 years. On the other hand, if you split your savings into half, it can allow you to survive financially for the next 16 years. Besides, you can save more if you stay invested for a long duration since the chances of growth of your funds can be relatively high.
- Consider risks
High risk during retirement is no longer a myth. While many of you might debate taking risks to protect your money, the rest of you might consider risks for higher accumulation of wealth. Considering risks can help you in receiving better returns as well as growing your investment portfolio rapidly.
Although greater risks can lead to loss of your principal amount, which can deviate you from your retirement goal, it is essential to start by making moderate moves. However, if you want to make a radical or larger shift, you should consider the market scenario. For instance, invest in stocks or equity when the market is in good condition.
In a nutshell, retirement planning can be a crucial aspect of your life. Although you might have started late, you can catch up with the help of these top four tips on last-minute retirement planning. Since you might have minimal time in your hands, consult a financial expert to guide you through the process that can allow you to safeguard your future before your retirement age.
