Retirement Planning: Effective tips for savings | Personal Finance Views

Tuesday, February 11, 2014

Retirement Planning: Effective tips for savings

Planning for your retirement and that too when it comes to your finances, happens to be one of the most crucial things that you need to do. It’s actually crucial that you do your financial planning in advance as far as your golden years are concerned. Ensure that you don’t run into difficulties at a later stage by starting to save up for retirement from now itself. Here are a few effective tips that should help you do so.

1) Start early

Never think it’s too late, and start as early as possible. If you happen to be young, then you should consider investments, IRAs and savings. Being young gives you the opportunity to be aggressive about your finances and take some risks as far as investments are concerned. If you’re older, then you've got to be a bit more cautious and not take any unnecessary risks. However, don’t make the mistake of letting it be, for otherwise it’ll be too late.

Retirement Planning

2) Plan accordingly

It’s imperative that you plan according to your individual income and financial circumstances. It’s also important for you to consider the kind of lifestyle you’d like to lead when you’ve retired. Take time out and draw up an effective plan and work on it accordingly. When working on a retirement plan, you need to create a budget specific for retirement. Here are some ways to help you –
  • The changes: Make sure that you think about the changes that can come about in future and plan your retirement budget accordingly.

  • The need: You should come to a decision about how much exactly you’d require to live a comfortable lifestyle. Don’t consider your present salary as a guideline.
  • Plan long: It’d be a good idea to plan for a long retirement. So you should save accordingly so that you don’t face any dearth.

  • Consider inflation: Take a leaf out of the book of today’s economic crisis. Keep in mind inflation when planning for retirement. Increase your investments if required.

3) Pay off your debts

Don’t make the mistake of carrying over your debt burden to your post-retirement years. Hence, when you start your financial planning, do make it a point to pay off all your debts at the earliest and then save up for retirement. Here are a few ways by which you can cut off spending and use that money to pay off debt.
  • Food: This is one area where you can actually save a lot and use that money to pay off your debt. Instead of buying lunch at work or buying that cup of coffee on your way to work, try making them at home. This is healthier plus saves you a considerable amount at the end of the month.

  • Luxury: Don’t just splurge on anything and everything that you feel like. When you feel keen on buying a particular item, you can try a trick. Take a deep breath and ask yourself, do you actually require this thing for continuing life? Then answer yourself honestly. If it’s yes, only then buy that item else don’t.

  • Time: Make it a habit to spend more time at home or with your family. Be wise enough to understand that it’s really no big deal to spend hours outside the house. You can spend quality time with family or friends back at home itself and it’d save you your precious dollars as well.

4) Step up the intensity

Finally, what you’ve got to do is step up the intensity of your plan as you start nearing your retirement age. Try increasing the amount that you keep aside as retirement savings. Also, try and increase the frequency of your contributions.

Keep in mind the 4 tips discussed above when you decide to save up for retirement. It’ll help you secure yourself a good amount to spend your golden years in comfort and happiness.

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