Wednesday, November 22, 2017

Heading into Your 30’s? You Should Have Started Retirement Planning Five Years Ago!

money retirement
In our 20’s, 30’s and even 40’s retirement can seem a lifetime away. It’s something that we look forward to in many ways as the idea of no longer having to go out to work and being free to do what we want appeals to many of us. But, think about your yearly income. That’s not going to be there anymore. If you want to be able to live comfortably and do whatever you want, you are going to need money. Even if you’ve managed to pay your mortgage off, which now the average age of a first-time buyer is so much older, is by no means a certainty, you’ll have bills, food and other expenses to pay for.

Now the average life expectancy is rising, and many of us can expect to live fulfilling lives well into our 80’s or even 90’s, retirement is something we need to think about much earlier. Especially those of us that work for ourselves or don’t have the security of company pensions. But, many of us spend the first few decades of adulthood struggling for money. The cost of living is rising; minimum wages aren't going up at the same rate, more young people than ever are in debt, struggling to get buy or living hand to mouth, and the prospect of saving is unthinkable.

What You Need

As a guide, to live comfortably in retirement, you should aim to have at least 70% of your annual income available. So, if you earn $50000 per year while working, you need $35000 a year in retirement. If you retire at 65 and live for a further 20 years, that’s $700000. The average income from social security payments post-retirement is around $15000 per year. So, to live a comfortable and happy life after retirement, you may need to find $400000 yourself. So, you should have started saving a long time ago. But, don’t worry, it’s not too late. Far from it. Let’s take a look at ways to start saving for your retirement.


While most of us are still aiming to buy our own home in our 30’s, some people are lucky enough to already be in a position to buy a second. Others come into property by other means. Selling is one option, as it gives you a large, fast cash injection. But, when it comes to saving for your retirement, renting your second property out is a good idea. This way you get a steady monthly income, and you can sell it later, perhaps when you enter retirement to give yourself a nice chunk of extra cash.

There’s a lot to think about before becoming a landlord. But, thanks to, you can continue to make money from rent even if the home needs some renovation work.

Savings Accounts

If there’s little chance of one massive cash payout coming your way, you need to save instead. Now our parents are living later you may not even have an inheritance to rely on until you are well into your own retirement. So, open a high-interest savings account and set up a monthly standing order for whatever you can afford. Interest rates are currently higher than they have been for a long time, so this is the perfect time to get saving. If you can afford to not touch this money, apply for a savings account which offers a bonus when no withdrawals are made. Saving is all about getting the most from your money, so make sure you shop around for the best deal to suit your circumstances before committing to move any money.

The most important thing to remember when it comes to saving is that every little bit counts. If you were to cancel some subscriptions or cut back on your nights out and buy budget food options, you could probably commit to saving $20 a week. That might not seem like a lot, but if you retire in 35 years, that’s an extra $36000 in your retirement fund, before interest.

Pay Off Debt

Saving or renting out property is no good if you are currently in debt. Being in debt basically means you’re paying for nothing. If you have $5000 on a credit card at 20% APR and just pay off the minimum 2.5% payment, it could cost you an extra $7000 and take at least 30 years to pay off. What a huge waste of money that you could be saving. So, to start with, instead of paying that extra $20 into a savings account, set up a standing order to pay an extra $80 a month off your credit card or other debt. The sooner you can shift your debt, the less it will cost you.

If you are struggling to pay off credit card debts, but have a good income and high credit rating, the best options can either be a balance transfer to a long-term interest-free card, giving you a much better chance of paying off extra. Or, consolidating your debts into one loan. Speak to an advisor or someone at your bank for more information.

Earn Extra

The best way to save extra money is always to earn extra money. If up until now you’ve managed well on your salary, any extra you earn you can comfortably put in that high-interest savings account. Working full-time can mean it’s hard to have time to take on any extra, but it’s not impossible. Here are some of the best ways to earn a little additional income:

• Get a holiday job. Shops are always much busier around the holiday season, so looking to take on weekend or evening staff to help out.
• Waiting tables. Bars and restaurants are frequently looking for staff. Working just one night a week you could earn double in tips.
• Blogging. Why not start a blog about your attempts to save for retirement and make extra cash through sponsored content, advertising and affiliate marketing?
Online surveys. There are many market research companies out there willing to pay you to answer questions online. You can do this for an hour a night sat in your PJs watching TV.

It’s never too early to start thinking about your retirement. In fact, now we are living longer, the sooner you put a plan into place the better.

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