Unsurprisingly, when we enter the world of work, retirement isn’t really something we consider. In fact, during those early days where our salary is low, some of us may even neglect to think about a pension.
As time progresses, these viewpoints inevitably change. We start to appreciate that we will need to look after ourselves as we get older, and some people may start to seriously consider the implications of retiring from work earlier than the standard age.
Some people might be lucky and allow their existing salary to take care of that early retirement. For others, it’s more about thinking outside of the box, which is where the remainder of today’s article comes into play.
Don’t neglect your pension
As we have already mentioned, pensions are something that is almost cast to one side during the early days of our career. Then, as the pace picks up, many of us start to revisit them and from time to time, even panic about them!
Well, this is one of the easiest ways to fast-forward and fund your early retirement. Granted, it’s still going to be easier for those of you with the higher salaries, but let’s not forget that pension contributions prompt a whole host of tax benefits. Not only that, but your employer will have to match whatever you contribute in most situations, which means that you can effectively bank “free money” (if there ever was such a term!).
Savings accounts will only get you so far
This next point might almost be contentious, but give us time.
From a young age, we are taught about the power of saving – and there’s absolutely nothing wrong with this advice.
Unfortunately, most of the time at least, sticking your money in a savings account is going to result in your losing money.
How does this happen? Well, even though the banks may pay you interest on your savings, this often falls significantly below the inflation rate. In other words, the value of money is rising quicker than the value of your savings.
To get around this, you will need to take risks. Investing appropriately can be key here, whether it is through stocks via software like MT4 Trading or even funds. There are of course high and low-risk options but if you are serious about increasing your nest egg, this needs to be done above any savings efforts.
Understand your new-look life
This final point isn’t necessarily about making more money for your retirement plans, but more about understanding how much you need to have and how much your life will change after retirement.
When you retire, your life will look different and perhaps not how you imagine. For example, while you may have paid your mortgage off, let’s not forget that you have more free time. Generally speaking, more free time results in more expenses, and this tends to be forgotten about. Then, there’s the cost of the kids, grandchildren and all of the other new obligations that you perhaps don’t currently have.