Whatever your age, you are never too young to start retirement planning. The earlier you start, the longer you have to achieve your aims and the bigger the helping hand you’ll get from compound interest. Don’t kick the pension can down the road, start saving now.
The best time to start retirement planning? Right now.
It doesn’t matter if you’re a fresh-faced graduate starting on the career ladder or a seasoned professional with twenty years of industry experience, if you aren’t yet saving into a pension, the best time to start retirement planning is NOW!
Over the years, Infinity’s financial planners have met their fair share of 40 and 50 somethings who fell for the myth that they could put off saving for retirement until later. It’s understandable. Life’s necessities are expensive and there are countless more exciting things to spend leftover disposable income on than a pension.
When we’re young there is a tendency to think that things will become easier financially as we get older, get promoted and earn more money. This leads many people to believe that they can put off saving for retirement until they feel they can afford it.
However, the truth is that for most of us things never end up becoming easier financially. In fact, often they become harder. Your salary may increase but outgoings have a nasty habit of doing the same. Your tastes change so your choice of restaurant tends more towards Michelin than McDonalds, and Uniqlo no longer cuts it for your clothes. You will probably buy your own place and saddle yourself with mortgage payments, maintenance costs and a seemingly endless stream of bills to pay. And you may also find yourself with that money pit of all money pits: a child. Or even several!
If you wait until you feel you can afford to save for retirement, you could easily reach retirement age before that day comes.
Retirement planning: the mid-life reality check
Mid-life tends to trigger a paradigm shift in those 40 and 50 somethings who bought into the ‘save later myth’. Their mañana mentality dissolves into blind panic as the stark reality hits that they are closer to retirement than the heady freedom of their 20s. They have no more disposable income than they did in their 20s but a lot less time to amass a pension pot to afford them a comfortable retirement.
If that’s you, don’t panic. Your situation is not ideal but there’s always time to improve your situation. Take expert financial advice as soon as you can so as to not waste any more time. It’s going to be harder for you to save for retirement but better late than never.
Retirement planning: save early
For those yet to hit mid-life, you have the luxury of more time. But it’s important not to squander it. Building a substantial pension fund demands patience, with investments accruing value over an extended period—the longer, the better. Compound interest is the magic ingredient that will help your savings grow but it needs time to work.
Now is the time to focus on long-term goals and prioritise saving over instant gratification. Your future self will thank you for the sacrifices you make now. A decent pension will give you flexibility over when you retire and freedom of choice to lead the life of your choosing when you finally stop working.
Retirement planning: save smart
If you haven’t already started saving for retirement, make it an absolute priority to start. Book an appointment with a financial adviser to discuss your situation and put some concrete savings goals in place to ensure that you will have enough to enjoy your twilight years.
A good financial adviser will help you see the bigger picture, focus on long-term goals, select the most appropriate savings vehicles to maximise your return, and regularly review your investments to ensure that they are aligned with your long-term goals. Choose wisely, and they will guide you towards a secure and comfortable retirement.
For assistance with your retirement planning, contact us for a friendly chat with one of our highly experienced advisers.
A leading provider of expat financial services and wealth management services across Asia.
