It is really important that everyone thinks about how they will manage in their retirement. Once we give up work, we will find it very difficult to be able to borrow money, particularly large sums and so we need to make sure that we not only a regular income but also the ability to save up for items or a pot of money that we can dip into. It can be daunting to think about how long we might need this money for and how we can afford to put anything away when we have other expenses to think about.
Many people will just think about a pension when they think of retirement. A pension is an investment which you would normally pay into monthly when you get paid. If you have a work pension then the employer might pay in some money as well. The money goes out before you get paid so you do not notice that it is missing and so it can be a good way to put money away. Some people do not start a pension though, perhaps because they have never worked or because they would rather have the money to spend. It is worth seriously thinking about getting one or a similar investment that can pay out an income during retirement.
One key thing about investments is that the longer you leave the money in, the more it is likely to grow. This is why we are told to start paying into a pension as soon as possible so that it has the maximum amount of time to grow. Even starting at 18 compared with 28 can make a massively significant difference to how much you have when you retire. Therefore, you really need to start thinking about things as early as possible and if you have children. You need to think about talking to them about it as well.
As well as work pension, some people will also be able to claim a government income. This is paid for when you pay in National Insurance, although if you are in full-time education, on maternity leave or on sick leave you can get some years paid for you by the government. This pension is a small amount of money, but will give you more than if you did not have a pension. If you are not sure as to how much you are entitled to or how much you need to pay in to get a decent amount you can find out by logging in to the government website.
As well as pension planning it is important to think about other things when you consider retirement. Think about the sorts of things that you might need money for and whether you can prepare for these before you retire. For example you might want to make sure that you home has been fully renovated, so that you will not have to pay out and do it or that you buy a new car that you can easily get in and out of even if you have mobility problems as you get older. You may have to adapt your home as well to make it easier to live in, perhaps putting in a downstairs wet room, installing a stair lift or things like this and so it is worth thinking about how you will afford the cost of these or whether you would be happy to move to a house that already has them. It is important to remember that retirement property tends to be expensive compared to other property and so you will need to consider that increase in cost as well.
It is well worth thinking about how much you think retirement may cost you. This can be tricky but if you prepare in the best way that you can then this should give you peace of mind. There is a lot to consider and the sooner you start preparing the better. Finance is usually the biggest concern and so by making sure that you have a pension and possibly a lump sum of money as well, you will know that you will be able to manage. Saving up while you are working and possibly investing money as well is a way that you will be able to do this.
There are many of us that wish that we had more savings. However, it can be tricky to save up at times and then it can also be difficult not to spend those savings. There are some things that you could try to see if you can have more success at increasing the amount of money that you are saving and holding on to it.
One big tip for saving is to put money into a savings account when you get paid. Many people will wait until the end of the month and then put whatever money they have left into a savings account. Although this is better than not saving at all, it is not as good as paying it in first. If the money has already been saved, then it is not available to spend. This means that you will have to budget better during the course of the month, to manage without that money. You can still put any that is left in the savings account as well but it means that you will always save a minimum amount every month. This can help those that have a tendency to spend money that they see in their current account to save more money.
Thinking about what you are spending your money on, is something that we tend not to do. We tend to buy things that we want, particularly if we know we have the money, without really contemplating whether they are really necessary. If we want to save more money, then spending less can really help as we will then have more money available to spend. So when you are shopping think hard about whether you really need the items that you are buying or whether it would be better to save the money instead. Consider whether the item is really necessary or whether it might be better to wait and see whether you really think that you want it or not. It can be good not to buy things on the spur of the moment and give some thought as to whether you really want them. This is especially true with items that are on sale or special offer as we can tend to feel even more tempted to buy the bargain item when we just may not need it.
It is worth making sure that you are motivated to save by remembering why you want to save more in the first place. It might be that you are saving up for something specific, perhaps a holiday, deposit on a home or something like that or you would just like to have the peace of mind of having some money to fall back on. Whatever it is, write it down and stick it somewhere prominent as a reminder of your goal. Then when you are thinking that it is tricky to not buy the things that you want, it will remind you of why you are working so hard. It could be good to put such a note in your purse or wallet or wrap it around your credit card.
It can also be useful to think of ways that you might be able to earn more money. This way you could put more into your savings account without having to spend less or you could boost your savings even more if you earn more and spend less. There are many ways that you could consider boosting your income, some will be easier than others. You could try to get more money from the job that you are doing, either by working more hours or asking for a pay rise. You could seek a promotion or look for a new job that pays better, if these are not options. You could also consider doing a second job, perhaps evenings and weekends so that you can earn some more. Another options is to find some ways to earn money from home, perhaps doing freelance work or finding work online. You might even be able to find a way to monetise your hobby.
So there are many things that you can try to increase eteh amount of money that you save. There may be some things that you do not want to try or feel would be too difficult but there should be something that you can have a go at that will mean that you will be able to save a bit more money each month.