Starting Late with Retirement Planning?
Practical Tips to Help You Catch Up
By Caty Naudé CFP®
Starting your retirement planning late can feel daunting, but it is never too late to take control of your financial future. If you have not started saving for retirement yet start today. Here are some practical considerations to catch up if you are starting late.
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Postpone Your Retirement Age
One effective way to compensate for late savings is to consider retiring later. By extending your working years, you have more time to save and allow your investments to grow. Delaying retirement can significantly increase your savings and reduce the years you will need to draw from those savings.
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Cut Unnecessary Expenses
To boost your retirement savings, cut back on non-essential spending now. This practice frees up more funds for retirement savings and instils a habit of wise spending that will benefit you during retirement. Analyse your monthly expenses and identify areas where you can reduce costs e.g. dining out less or cancelling unused subscriptions. Allocate these savings directly into your retirement account.
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Generate Additional Income Streams
Take a proactive approach to your retirement planning by exploring your hobbies, skills, or interests that could be monetised. Whether it is freelance work, consulting, or turning a passion into a side business, generating extra income can significantly boost your savings rate. Start this process now so that you can allocate the additional earnings into your retirement fund both before and during retirement.
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Consider Contract Work
If your job allows it, consider working longer on a contract basis after reaching traditional retirement age. This option can provide flexibility while still generating income, allowing you to save more aggressively during those years and reducing your retirement income need early in retirement.
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Downscale Before Retirement
Another practical strategy is to downsize your accommodation setup before or during retirement. Selling a larger home and moving to a smaller one can free up capital that can be redirected into your retirement savings. This not only increases your savings but also reduces ongoing living expenses.
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Build an Emergency Fund
While focusing on retirement is crucial, do not neglect the importance of having an emergency fund. Aim to save enough to cover three to six months' living expenses. This fund acts as a financial buffer against unexpected costs or calamitous events. It prevents you from dipping into retirement savings when emergencies arise.
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Automate Your Savings
Set up automatic contributions to your retirement accounts as soon as possible. Automating your savings ensures consistency and helps you build wealth without thinking about it actively each month.
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Seek Professional Guidance
In conclusion, while starting late with retirement planning presents challenges, taking proactive steps today can set you on the path to financial security for tomorrow. Remember, every little bit counts—starting now is far better than waiting until tomorrow! For personalised advice, consider consulting with a properly qualified and experienced financial advisor. Ascor Independent Wealth Manages CC can be contacted for a complimentary initial meeting to help tailor a plan specific to your situation, ensuring you are making the best decisions for your future.
Read more about Ascor® Retirement Planning Services
Related Topics
https://ascor.co.za/when-to-start-planning-for-retirement_yesterday/
https://ascor.co.za/time-is-money-why-starting-early-matters-in-retirement-planning/
https://ascor.co.za/put-retirement-planning-on-your-2023-to-do-list/
https://ascor.co.za/financial-needs-analysis-for-retirement/
https://ascor.co.za/when-and-how-to-retire/
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