Retirement is called the golden years of life because you will finally have the time to do all the things you love. Without a nine to five job to go to, your schedule will automatically open up, and you will be able to take up a hobby or take a trip.
However, for it to be a carefree time when all your dreams become a reality, you must start saving from a young age. By setting up a retirement plan, you can be sure that you will remain financially secure, in spite of the fact that you do not have a regular source of income.
So when should you start planning for retirement and what are the various steps that must be taken? If you think about it all at one time, it can get very overwhelming. Hence, let us take it one decade at a time.
In your 20’s
At this age, you would have just graduated from college, and you are taking up your first job. With loans to be paid off, thinking about saving for retirement seems irrelevant, especially because you have years until you retire. At this point, your primary focus should be on clearing your debts. Additionally, you must save everything you can. Even a small amount will do a long way over time. You should deposit this money in a separate retirement fund that limits the number of withdrawals.
In your 30’s
This is the point when you will probably be married and thinking of starting a family. Your dream of owning a house will materialize, during these years. Hence, the first thing to do is to reassess your debts and find out how much you owe. You must then make sure that you set aside some funds for a rainy day. Many companies offer a pension scheme, and you must make sure that you get enrolled. This way a part of your salary will be set aside for retirement, every single month.
In your 40’s
Ideally, by the time you reach your forties, you should have a fair bit of money saved up for retirement. All significant debt must be paid off, and the savings should come in regularly. However, if you haven’t started saving yet, there is no need to be alarmed, there are some companies that offer savings plans that will help you to save up for your golden years.
In your 50’s
This is the time when you put your head down and get serious. With no outstanding debt, you must look to make significant contributions to the retirement fund. Monitor your pension fund. Find out exactly how much money has been accumulated and where it has been invested.
Finally, the time you have been planning for is here. You have reached your sixties, and it is time for you to retire. If you followed all the steps, you should have the funds to not only live comfortable but to also have the time of your life.
Summary: Retirement has to potential to be some of the best years of your life. However, for this to become a reality, you need to start saving at a young age. If you are wondering what exactly is the best time to start saving, here is a breakdown of ideal spending habits, one decade at a time.
About the author: Vaibhav is a graduate in finance and has a sound knowledge of how the industry functions. He often shares his views on how to save and what the best retirement plan you should choose to make sure your golden years are priceless.