Panicking About Retirement? Worry no More
Pensions are a major source of worry for many. Those who are saving wondering if they’ve got enough to fund a comfortable retirement and those who aren’t wondering how much an elderly kidney will fetch on the open market…
It appears that an alarming one in seven people aren’t contributing to a pension plan, with half of women aged between 25 and 39 not saving. All told, more than half of the workforce faces a penurious old age.
How much will you need?
The average retired couple will need around $24,000 to feed, clothe and house themselves each year. If they want a few luxuries and a bit of traveling, then this figure rises to $36,000.
If one or both partners gets a halfway decent pension, then they’ll need around $265,000 to $335,000 in a defined pension savings account.
It’s never too late to start
It’s better if you start early, though. If you start at 20-something years old, then you only need to save $200 or so each month to reach your target. Once you’re 50, this monthly saving needs to be ramped up to $840!
Don’t panic!
Work out how much you’ll need first. Do you already own your house outright, or are you planning to sell it and downsize? This move alone could fill the coffers.
If you’re renting you should consider downsizing or moving to a cheaper area, especially if you’re not expecting a huge income after retirement. Then you need to look at your lifestyle; if you want to do some RV travelling or do that pottery course you always planned you’ll need to fund it somehow.
Then…
Save more if you need to
If you get a bonus each year, do something with it other than plan a holiday. The same applies if you get a pay-raise – siphon the extra money into your pension fund each month.
Alternatively, you could use the extra money to buy a valuable asset like gold. Click here to find out more about investing in precious metals. You never know, you may have a talent for it; if you do, it could make for a very comfortable retirement.
Use your existing assets
If you have a spare room, you could take in a lodger or maybe exchange students from a local college or university. Many colleges need reliable, responsible older people to host foreign students for a month or so and the rates can be very good indeed.
If you’re feeling time running out, don’t despair
Older savers can get tax relief on their pension contributions, so make sure you’re taking advantage of this each month – every little bit helps after all.
You also need to keep an eye on your pension pot as it grows to see what changes you could make to it to ensure it’s big enough by the time (or, even better, before) you retire.
It’s also a good idea to speak to a financial planner to find out where you are and what else you could do to make the most of your savings and your fund.
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