Tips on How to Start Saving For Your Retirement

You are probably in your 20s or 30s while reading this and you never have the thought of saving or planning for that time when you’ll be retired and can no longer be actively earning a salary. There is no better time to start planning for retirement than now.

Retirement doesn’t necessarily signify old age; rather it is a period when you can stop actively working and earning a salary and still have enough monthly income to live by.

Who says you can retire by 40 or 50 and pursue your other life’ interests without worrying about money. Your time of retirement is a personal decision; you decide when you want to retire. You also have to decide how much you want to retire with. You can almost not retire and still live comfortably if you don’t start planning and saving now. Here are tips from financial management experts on how to save reasonably towards your retirement.

1. Know What You Exactly Need

According to some financial experts if you are surviving well on a certain income now that you are still actively working then you will likely need at least 70% of your pre-retirement income to survive monthly as a retiree. In other words when you retire you will be able to live on 70% of the income you earn while actively working.

Retirement isn’t cheap as you will probably have the same basic needs of feeding, shelter, entertainment, health etc. The standard advice is to aim to save 3 times of your current salary by the time you are 45.

2. Get a Fixed Savings Account

The essence of having a seperate savings account is to ensure that you discipline yourself enough to move some of your monthly income into an account that you cannot easily withdraw from. Have, if possible, your bank automatically pay a certain percentage of your salary into that account every month. From this savings/investment account you can then only move funds to either your retirement fund or to reasonable safe investment vehicles.

3. Start Small and Increase Gradually

This calls for having a budget of what your monthly spend is like. Then plan to start setting aside small amounts that you can easily save and grow the amount you save each month from there. Whenever your income increases the amount you save should increase proportionately as well.

4. Invest Smartly

To actually get a sizeable heap of funds for your retirement you will need a little diversified investment approach. Get active in learning about investing in stocks, bonds and hedge funds. Get a stockbroker who understands the market and can give expert advice on where to invest. Become an active investor instead of a passive one that just hands over funds to an investment manager.

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Tips on How to Start Saving For Your Retirement by

About Paul

Paul Eze is the Co-founder and CEO at NGCareers. He is an avid writer. Connect with Paul on Twitter

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