By Emmanuel Zvada
The mere mention of the word “retirement” brings a certain relief and shifts the mood to those working hard daily in their eight-hour shifts. Retirement planning is essential and should be considered by almost everyone at an early stage of their professional life.
To enjoy a peaceful retirement life later, you might have to consider starting retirement planning sooner.
Planning your retirement at an early stage in life might buy you more time and also help you build a decent retirement corpus.
Planning for retirement not only ensures additional sources of income but also helps in dealing with medical emergencies, fulfil life aspirations and makes one financially independent.
Retirement is something that we should not be afraid of but rather be happy as we know that it is coming,thus giving us time to plan for it.
In fact, after retirement, you can even still be able to pursue your unrealised dreams and still be active and busy.
For the young generation, planning for your retirement should start now even if you are years away from your retirement.
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When can I retire?
The ability to retire is very situational depending on each person’s financial situation, lifestyle, and future goals.
However, understanding your current financial landscape and identifying the type of lifestyle you wish to have in retirement are great starting points.
Retirement age is no longer cast in stone.
It’s basically up to you and you can retire early if that’s your chosen option.
Once you have a clear understanding of how much money you will need to live comfortably in retirement, you can run long-term asset projections to determine how your current asset base must grow as you approach the end of your career and by that you can project when you want to retire.
Why do people retire?
There are many reasons why people retire and this can be either early retirement or normal, one can retire for their personal wellbeing where they just cannot continue to work for their own reason or loss of job via retrenchment or the normal retirement where one has reached the age that they cannot continue to work efficiently and effectively.
Everyone has different needs and goals for their retirement.
It is sad, but the majority of people still do not begin their retirement planning until they are a few years away from retirement.
One can retire but still become active and join other jobs that have less pressure or are less demanding or even decide to do their own business.
Preparing and planning for retirement
One may be getting a huge salary now and everything seeming to be well, but one question which remains and need to be answered is: “What next then after retirement and is there any sustainable plan?”
Your stay in the company will not guarantee job stability but rather, for those nearing retirement the undeniable truth is that whenever a company has to downsize, employees nearing retirement tend to get axed first — so be ready.
Realistically, the majority of people only start planning for retirement when they are about to retire.
If you are unprepared, this will weigh you down emotionally, physically, and financially.
Have a saving mentality
Saving for retirement may not feel like a priority if you are younger than 35.
After all, retirement is decades away, and if your employer doesn’t offer a retirement plan, there may be even less incentives for you to start saving.
The earlier millennials start investing for their future, the more time their investments have to grow and compound.
You need to save for the future and saving should start the moment you realise that you have a future.
Once you know why you are setting aside part of your salary, deciding to save rather than spending your extra money should be easier.
It is more advisable that you track your expenses, and make sure you buy only what you need rather than overspending.
The more you make these habits part of your daily life, the easier it is to manage your money and the better your savings will be.
Have a health plan
Medical treatment is expensive and you must have a plan to cope with its escalating costs especially way before your retirement.
The reason is that medical emergencies are very expensive and they are common.
If you have the misfortune of undergoing a medical emergency without insurance, it is easy to find yourself in a crippling medical debt, and seemingly no way out of the mess, hence having a health plan will be beneficial even after retirement.
In actual sense, it will be best to look around for a reliable and affordable health management company that can be used even after retirement.
Invest some or most of what you save
Investing your money is crucial because it gives you the potential to grow your money with compounding interest over time.
It would help if you shifted your mindset to see everything you do with money as an investment.
The value of a dollar fluctuates daily, and over time inflation decreases that same dollar’s ability to purchase goods and services.
Therefore, saving, investing, and even buying items should be an investment.
You should also know that every investment involves both risk and reward.
The more reward we seek, the more risk we must take, and vice-versa, hence it remains key to start making some investments as they will benefit you in the near future.
Create plan for the retirement you want
A retirement plan doesn’t have to be daunting, it’s important to just get started.
Once you know where you are heading, a comprehensive retirement plan is like any good global positioning system.
It helps you get and stay on track to your destination even as your life, the markets and the economy change.
Preparation of retirement strategy should commence as early as possible so that you will enjoy the future.
After working hard just to make ends meet, retirement is what most people wait for.
Retirement is a mirror that reflects the thoughts, habits, and behaviours you bring to it.
Another factor that people overlook is the idea that retirement magnifies what they already are, not necessarily what they want to be.
The right time to plan for retirement is now since we retire from work not from life.
