While it is encouraging that over the last decade pensioners’ incomes have increased in real terms, in the current economic climate, how much of an impact does that actually have? With inflation in the double figures, it’s gotten increasingly difficult to make your money last. Since we are in the midst of challenging financial times, it’s important to focus on your short-term finances, but that doesn’t mean your long-term financial plans should fall by the wayside.
This does not constitute advice and advice should be sought in all instances before acting on it.
Here are a few ways to help ensure your retirement savings remain strong over time:
Revisit your financial goals
The economy is never static and increases in inflation are a given. You should never trust that your current financial goals will always stay on track; you should always revisit them to see if you will achieve them in the timeline you’ve set and make adjustments when necessary. What you and your adviser determine as regular reviews is up to you, but it’s essential you revisit your goals periodically.
Keep an eye on your direct debits
The very convenience of a direct debit means that once you’ve set it up, you can forget about each month. Of course, many people sign up for free trials and forget to cancel before the introductory period is over, or keep paying for goods or services they no longer need or could probably live without. Take some time to check your bank account for these automatic payments to see how much you could save by eliminating unnecessary direct debits.
Make and keep your spending priorities
At the outset of preparing your financial plan, you will have made a budget as well. It’s crucial to stick to that budget and include big purchases when you anticipate needing to make them. If things crop up that you hadn’t planned for, it’s important to figure out whether these costs are essential or simply nice to have. Of course, the opposite is true, as well. If you have been planning and saving for a big purchase be sure to act when you have your finances in order rather than waiting when prices could be even higher — thus throwing off your budget later on.
Become — and stay — debt free
As you are well aware, when inflation is out of control, interest rates increase. If any of your debt is subject to a variable rate, your payments will certainly go up as well. Becoming debt free should be a priority so that you pay as little interest as possible, especially during times of high interest rates.
Even if you’re focused on what your finances look like now, contributing to your pension is essential to ensuring you hit your retirement saving goals. The longer you have been investing, the better your returns will be. You also benefit from employer and government assistance and missing out on that is akin to missing out on free money. Investing is one of the best ways to protect against inflation and since retirement is a long way off for most people in the prime of their career, investing will be a critical aspect of your retirement plan.
Stay on track for the future you want
The experts at Dental & Medical Financial Services understand that your goals are unique to you and we’d love to discuss how we could help. Don’t leave your future up to chance, get in touch with us to discuss your retirement plan today.