You’re supposed to start saving as soon as you start earning. Which is great advice, but what if you are already 35 and you haven’t made any real inroads towards saving for your retirement? The good news is that it’s never too late to start – it might take a lot more out of your salary now and you will have to make a few hard choices but it’s not impossible.
Here’s what you can do:
See a financial planner who can calculate what you need to save to “catch up”. If you are 35 now, you still have a savings timeline of at least 25 years to retirement so you can invest your savings aggressively in order to achieve maximum returns.
If you haven’t saved at all for your retirement or you cashed out your pension funds previously, you need to save 25% of your salary each month in order to retire at 60 with a monthly pension equivalent to 75% of your final salary.
Do the research to find out how you can go about generating a second income to boost your savings. Identify what your talents are and find a gap in the market that you can fill. You don’t have to be Bill Gates from the word go. Start small – every little bit will help.
Did that 25% figure scare you? It probably should, but let’s be practical. Look at your budget very carefully and think about where you can trim your expenses and follow us on Facebook for weekly tips. If you can get used to living on 50% of your income now, that means you will be able to get by with less in your retirement.
Seven years ago, everyone was falling over themselves to get into the property market. Chances are that you were too. You would have been about 28 so either you bought a trendy apartment or you went for the full-scale family home with a yard. Either way, when you are retiring you may want to downscale to a small retirement complex or maybe just a smaller place in a cheaper neighbourhood. You should also consider downscaling your car to a nippy run-around that will cost you less each month and save on petrol costs.
It is already being bandied about that the first person who will live to the age of 150 has been born. With people living longer than before, thanks to medical technology and improved lifestyle habits, you can postpone your retirement to a later age. Invest in developing skills now that will allow you to work on a freelance or consulting basis in your later years. You might also embrace the option of becoming a trainer in your chosen field. Skills development is an area where there are loads of opportunities if you are willing to make the time and effort to empower others.
As writer Antoine de Saint-Exupery said, “The time for action is now. It’s never too late to do something.”