Take Retirement Investing Into Your Own Hands - Tips for Effective Planning & Management
A sobering study finds that more than half of all working Britons aged 30 and over aren’t saving enough for retirement. While it’s true that every retirement plan is different, and that not every working-age individual needs to save at the same rate, it’s troubling that so many Britons appear to be underprepared for the future.
Fortunately, the fact that one isn’t currently saving enough does not mean that one cannot save enough. Follow these planning and management tips to take retirement investing into your own hands, regardless of your personal financial situation or post-retirement plans.
1. Articulate a Vision for Retirement
Begin by articulating a vision for your retirement. Earlier in your career, when you have more immediate and apparently pressing concerns, this may seem like a low-priority exercise. After all, won’t you have plenty of time to plan for your retirement as your last day of work looms?
Unfortunately, investing for the future necessarily involves long timeframes — decades, not years. It’s never too early to determine what precisely you want out of your later years, and then to set a plan in motion to achieve those ends.
2. Consult With a Reputable Investment Adviser
While many Britons successfully plan and save for retirement without ever contacting a professional, you may find it useful to speak with investment advisers who understand the nuances of long-term investing. They may have insights or advice that you haven’t yet considered. Regardless, it’s often helpful to speak with someone not directly involved in day-to-day investing decisions in your household.
3. Make a Formal Accounting of Your Household Budget
Next, put together a household budget that accounts for all of your income and spending. As you move toward a carefully considered, sustainable spending plan, this will serve as your baseline. It therefore needs to be as accurate as possible, lest it leave out important expenses or inflows that affect your retirement calculus.
4. Determine What You Can Comfortably Save
Using your accurate household budget as a guide, determine what you can comfortably set aside each pay period. This can be a set amount, expressed as a percentage of your total pay. If your income fluctuates from month to month, set a longer-term average that works within your budget. If you receive regular bonuses for performance or other achievements, determine what — if anything — you’ll set aside from those.
5. Understand Your Pension Options
The pensions landscape is quite confusing for the uninitiated. Fortunately, the government provides — along with private advisers, in many cases — useful resources and guidance for workers in the midst of choosing the best pension option for their needs. Self-employed individuals have a host of additional considerations to face, as well.
6. Remain Disciplined & Adjust Your Plan As Necessary
This may well be the most difficult part of your retirement planning and saving endeavour: continuing to save with discipline in the face of the unknown. Unexpected expenses or life events, such as job loss or divorce, can side-track even the best-laid financial plans. It’s important to anticipate these events and devise alternate plans to ensure continuity (or, at least, minimal disruption).
Where Will the Future Take You?
If anyone could predict the future, they wouldn’t need to spend much time building and executing an investment strategy. Such foresight would quite literally be worth billions.
While you can’t know for sure where the future might take you, you probably have a good idea of where you’d like to end up. Putting together a comprehensive, realistic investment strategy is a crucial aspect of that vision. If you haven’t yet begun, it’s high time to get down to work.