Financial Planning For Retirement – It’s Never Too Late

With an ageing population becoming a prominent problem in almost every Western society, and a corresponding lack of state funds to pay out adequate pensions, financially planning for your retirement has never been so important. If you don’t, you could be facing a reduced standard of living that becomes more difficult as you get older. With life expectancy still growing, there’s no telling how far your savings might go.

As with any financial planning, the first thing that you have to do is identify what your potential incomings and outgoings are likely to be. If you’re still a way off retirement this is likely to be little more than an estimate, if you are just about to retire or have just retired it’s still not too late to be planning your financial future, and it makes this job easier.

You need to first sit down and total up your income during retirement: this will include any state or private pension that you have, savings and/or any part-time work you are/will be doing. If you have any other sources of income that will continue during retirement, include these too. Then make an approximation of monthly outgoings. You can never be exact with this but rough figures will do for now. Later on, if you find your figures wildly out with your plan, you can adjust accordingly.

What you might find is that you income doesn’t go nearly as far as you’re used to, and you might be bracing yourself for a more austere retirement than you would otherwise have hoped for. This is one reason to start putting into a pension as early as possible, but if you are much closer to retirement then investment is certainly an option to look at.

If you can identify an amount of money that can be invested, whether as a lump sum or in small monthly installments, depending on how you invest, you could find yourself getting a significant return on your investment without sacrificing too much in the short term. And the advantage of this approach is that it could significantly improve your retirement standard of living.

There are many options for investment that don’t have to involve playing the stock market. It might be an idea to speak to your local bank, or if you have another financial advisor at your disposal, all the better. You can do things as simple as putting some money in an ISA, one of the best options, as interest earned from one is tax-free. You can find some great government advice at nidirect.

Whatever you do, you don’t want to end up faced with a meagre pension and a lump sum of savings to last you throughout your retirement. Part-time work could help ease the financial burden but you don’t want to rely on this either, perhaps nor do you want to work in your retirement. Whether you’re 40 years or 4 years off your retirement, it’s important to start planning now.

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