When should you start planning for your retirement? Certainly not when you’re only a few weeks away from your last day at work!
When you are young and enjoying your career, the last thing you want to think about is your old age and retirement. Yet it is best to prepare for retirement early when costs are affordable and you have a longer period to build a fund. Take a few tips from those who have retired so that you make the best out of your evening years.
Spending too much in one’s peak years – Spending money, especially when you’re earning a good salary is easy. Plus there are credit cards and loans to repay that make saving for the future tougher. But the wise decision is to balance your spending carefully – particularly during your peak years because you’ll need that extra money most when the peak tapers off.
Retiring too early – Retiring at the right time should be your focus as retiring too early can leave you with less time to save and bring you a longer retirement period with a reduced inflow of income. Far better to work as long as you can and let your fund accumulate with compounded returns over a longer time so that you’ll have more money later, when you really need it the most.
Not planning for all that free time. If you are used to working full time, filling all that free time during retirement can be a big challenge. Ideally, you should cultivate hobbies and other activities before you retire so that you’re not overwhelmed by the free time.
Not having a plan to supplement your retirement income.
When you are working full time you rarely have time to enjoy your hobbies or think about what you can do to supplement your income. Retirement provides you the opportunity to put to good use all your experience and expertise gained during your career and also perhaps to do something completely different that you enjoy.
Not taking better care of one’s health. Entering retirement in ill health may reduce both quality of life and finances. Maintaining optimum health throughout life and specifically “going into training” leading up to retirement, can make your retirement the best years of your life. But don’t despair if your health is less than perfect when you hit retirement. Many retirees are able to improve their health once retired, when they have more time to devote to fitness.
Your retirement should be a time where you will enjoy the fruits of all your hard work. The pension you receive should make your retirement comfortable and secure. Therefore, you must plan for a regular income during your retirement, well in advance, keeping in mind that there could even be catastrophic events such as illness, to face.
Suren Perera, Head of Marketing at AIA said: “Surprisingly a lot of people have the perception that EPF and other funds you contribute to all your working life will take care of your retirement, only to realise too late that it isn’t sufficient for the lifestyle you want to maintain. So planning for a regular pension is good sense.”
Advice on how much you will actually need for your retirement and solutions to help you plan for your retirement can be easily obtained from AIA Wealth Planners or by calling 011 2310310.