Saving for retirement can prove to be a very complex task, however, this does not have to be the case. Many people are not making the necessary provisions for retirement. When you start a new job or enter the workforce for the first time, the last thing you think about is saving for retirement, however, you should start saving for retirement as soon as possible, to ensure that you live comfortably in your old age.
It does not matter how far away you are from retirement, you should start saving and not spend this money on other things. As a rule of thumb, it is recommended to save 15% of your gross income, over a period of 40 years, between the ages of 25 to 65. Remember, you will also need to develop a financial plan for major life events – expected and unexpected. This could include anything from medical needs to changing family dynamics.
When thinking about your financial future, it’s important that you make retirement planning a top priority. Today, it’s even more important to start planning for retirement early, as fewer employers are offering pensions and retirement savings. This means that retirement is now more challenging than ever, as traditional pension plans are becoming few and far between. Recently, the responsibility of saving for retirement has shifted from the employer to the employee.
Another reason why it is important to start saving for retirement as early as possible is that longer lifespans have led to people outliving their savings. For example, if you live up to 78 years old, you will be in retirement for a long time. Longer life expectancies also lead to more money spent on healthcare.
If you have not started saving for retirement yet, it’s not too late. Make sure to work with your financial advisor or a trusted financial professional to help you to set out new savings goals so that you can get back on track. With the proper preparation and planning, you can have a comfortable retirement.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. (E&OE)