Your retirement can be decades away, but when to start is always a question especially for the young ones. The answer is pretty simple, start today. The earlier you start saving, the more time you give your money to grow.
Here are a few guidelines on retirement planning you ought to start by your 20’s.
1. Decide on the Lifestyle you want during Retirement
The lifestyle you want to have after retirement serves as your compass when you start with your savings. Whether you prefer a laid—back simple life or a life of parties, travelling, and luxury, you’d still need a pretty hefty amount. Think of your basic necessities, your bills, the possible inflation, and even emergencies. As early as now, prepare yourself for all of these so you have (maybe even more than) enough when the time comes.
2. Know and Use Your Benefits
Take advantage of your government-mandated and employee benefits. Make sure your contributions are covered as soon as you start working to let them accumulate. These benefits such as health plans, retirement plans, and even loans, contribute to a great retirement. The goal is to start with the contributions as early as you can and make sure that they’re consistent. Because like wine, these get better — bigger even— as time goes by.
3. Try your Hand at Investing
Starting your retirement savings around your 20’s or even on your 30’s gives you a lot of breathing space. Take advantage of this and start investing. Take it slow but remember that the goal is to diversify your portfolio so you have different income streams even after you stop working altogether.
4. Keep Track of How Long until your Retirement
If you still have more than a decade away, start with step 1 which is otherwise known as retirement life planning. Instead of going straight into the finances, take some time to figure out what you want to do once you’re retired. Once you’ve settled that, you can start with basic savings and budgeting.
When you only have less than a decade until retirement, you’ll need to organise your retirement assets already — think benefits, pensions, etc. By this time, you should have a clear idea of how covered you will be during your retirement, courtesy of all your assets.
The bottom line is this: developing the habit of saving and making smart financial moves as early as you can will not only benefit your retirement, but will also make you financially independent at an earlier stage in your life. So if you’re asking if it’s too soon to start? Our answer will always be a “no”.