Saving for retirement is one of the most important things you can do in your life, unfortunately, it can also be incredibly challenging. Not long ago, it was normal to work for one company your entire career, but nowadays the onus for accumulating a healthy retirement fund is on individuals. There’s no sign of saving getting any easier either, with changing demographic trends like longer life spans and delaying marriage that contribute to the struggle.
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Don’t live with regrets
No matter how difficult it might be, saving for retirement as early as possible is an important step to take when focusing on your finances. Many people close to retirement age often express regret that they didn’t start saving for retirement sooner.
According to research from the Pensions and Lifetime Savings Association, nearly half of the respondents expressed regret about not saving into pensions earlier, and close to two-thirds (64%) wish they had started contributing to their retirement savings at an earlier stage than they did.
Twenty-six percent said they only started paying into their pension once they turned 30.
Many cite the idea that they didn’t feel financially stable enough to begin any sooner, while others priortised allocating funds to raising children or paying off their mortgages above putting money toward their pension pot.
One could see the arguments for these expenditures, but shockingly a third (32%) prioritised leisure activities and holidays, clothing, and their pets above saving for retirement.
Get on top of your finances early
Hindsight is always 20/20, but when you’re in the thick of it, you might seem like you have your financial priorities sorted. In your 20s and 30s you might want to prioritise things like holidays, paying debts, or raising a family — and while these are all absolutely valid ways to spend your money, you should still strive to find a balance between living in the now and planning for the future.
Many young people get stuck in the way of thinking that retirement is so far off, that they don’t need to worry about it just yet. But even if you feel like you have plenty of time to save and enough money now, many people wish that they had begun their retirement savings journey when they were young.
Every day, the cost of living gets higher so the more time you have to save and allow for your money to compound, the better. You might even find that your calculations are incorrect or insufficient for the future when inflation has invariably influenced the real value of your money. And the truth of the matter is that you never be completely sure just how much money you’ll need for retirement.
When it comes to your financial plan, pensions are more important than ever before. While automatic enrolment has helped to bring pension savings into the millions, it’s a fairly recent endeavour, so for many over the age of 50, it likely won’t help as much as it will for those with more time until retirement.
Working with a professional
You might think you have a handle on your finances and how to save for retirement. But according to research from Royal London and ILC, you could potentially add up to £47,000 to your pension just by seeking professional financial advice.
To avoid walking into retirement uncertain, you need to understand how much you have in your pension, what that money will look like as retirement income, and of course, how long you might need that money to last.
For advice how to ensure your money lasts a lifetime, get in touch with the experts at Dental & Medical Financial Services today.