Whether you’ve just entered the working world, or you’re counting down the days until you leave it, it’s important to think about your retirement. Having a plan for your future can give you something to work towards, and could even make early retirement a possibility if that’s something that you want to do.
It’s important to think about the kind of retirement you want, and make a plan for securing your future income. You can never have too much money for your retirement, so finding ways to grow your fund can make sure you’ve got a comfortable future ahead.
Take a look at some of the ways you can grow your retirement fund in 2020.
Make some calculations
Most people have no idea how much money they’re going to need to retire, especially when you’re only at the beginning of your career. However, the sooner you plan for your future, the brighter it will be.
How much money you’ll need for retirement depends on several things. Firstly, you’ll want to look at your current lifestyle and how you spend your salary now, as well as think about the kind of lifestyle you want post-retirement. After paying off your mortgage, your retirement outgoings should be much lower than they are now, meaning you might not need as much as you though.
Many people stick to the 4% rule, which means withdrawing 4% of your savings each year. While this might not sound like much, it does give you a great incentive to grow your savings.
Give early retirement some consideration
Early retirement is a goal that’s becoming more and more popular. While some people are managing to retire in their 30s, it can be a very tough goal to try and achieve. Retiring in your 40s, however, could be a much more attainable goal, and could be easier than you imagine if you grow your savings enough.
To retire at 40, you will need to work hard at growing your savings now. You’ll likely need to make some lifestyle changes to help you put away as much money as possible, and make some smart decisions regarding property, etc. The ‘FIRE’ movement (financial independence, early retirement) is one that’s growing in popularity, and you can certainly get a lot of tips thanks to others who’ve successfully retired at a younger age.
Saving for early retirement takes discipline, but it can be worth it to enjoy your retirement early. From more frugal living to cutting all unnecessary expenses, it is possible to save up what you need to retire early.
Get the most out of your pension
Having a pension plan is one way that you can save for retirement. Making monthly contributions to a plan that invests on your behalf is great, but it does come with its risks. While the benefit of having a pension plan is that you should know what your future monthly earnings will be, there are questions about security and pensions. If you have any doubts at all about your pension, it’s recommended that you talk about them to your provider. You might want to do some comparisons with other plans, and possibly make a switch, especially if you want to move to a lower risk pension.
Use a side hustle to grow your savings
If you don’t believe your current earnings are enough for you to save for retirement, why not use a side hustle to grow your savings? There are plenty of ideas for lucrative side hustles that you could start to help increase your monthly income. This can allow you to put more money aside for savings, as well as make your life more comfortable now.
Side hustles have many benefits, and can even help you turn a hobby or interest into money. But while it’s great to earn more money, you need to consider your health too. If a side hustle eats too much into your free time, or your main job is beginning to suffer, then you might need to think about stepping back. Boosting your earnings can be fantastic, but it shouldn’t leave you exhausted in the process.
Invest your savings
It can take a long time to build up a sizable savings fund, but having it simply sit there could be a wasted opportunity. By investing your savings, you can grow them and perhaps meet your retirement goals much sooner. You’ve got many options for investing your savings, including stocks and shares, but investing in property is considered a great move.
You’ll have different options available for investing in property. For example, you could put more money into your own home, focusing on growing its value ready for the future, or you could invest in other properties to build up your portfolio. Investing in commercial real estate has a lot of potential to provide you with benefits when you retire. Investing in property not only gives you something worthwhile to do with your savings, but it could also help you earn a living long after you retire.
Assessing your retirement options is a great way to plan for the future, but it can be confusing and overwhelming. Seeking financial advice is a sensible option if you’re not very clued-up about finance, and can help you understand any risks involved in your decisions. Whether you choose to speak to a friend, relative or an independent adviser, you’ll be able to understand all of your options to help you make the best decision for you.
Thinking about your retirement plan can be daunting, but if you’re serious about planning for your future, the time to start is now. By looking at ways of growing your retirement fund, you can think more carefully about the money you’re going to need to enjoy a comfortable and happy retirement. Could 2020 be the year you begin your investment portfolio? Consider all of your options and start your roadmap to retirement that can ensure you have a bright future ahead.