A lot of young people do not want to bother with the word, “retirement” because it is associated with old age. Why worry about something that is still so far away, when you can just think of “now”?
If you are one of such people, kindly pay attention, so you can live the baby boy or baby girl life in your old age!
1. Open a Retirement Savings Account Now!
If you’re in your 20’s, you probably believe you will remain young forever. Try closing your eyes to imagine what your old age would look like. Would you have enough to live on, without depending on your children? If you’re not sure, then you need to open a retirement savings account now.
2. Calculate Your Retirement Numbers
After you open your retirement savings account, please note the age at which you desire to retire and how much you want to live on. Take your time to decide. The sum you settle on, will influence what you set aside each month, in your retirement savings account
3. Structure Your Savings Plan
Ideally, you should save nothing less than 10% of your annual income. To ensure you save 10% or more, automate the deductions from your savings account. Break down the automated deductions into a monthly or quarterly instalment plan, depending on which is more convenient for you.
4. Seek Out the Best Pension Products
Now, you don’t need a prophet to tell you, that putting your retirement savings in a regular savings account, is similar to shooting yourself in the foot. Such accounts were not designed to increase your income beyond inflation rates. So, seek out a pension plan that grows your income at a steady rate.
5. Don’t Allow Debt to Stop Your Progress
You may owe debts from taking student loans or from borrowing from friends. While paying them off, ensure the money used to clear those debts, doesn’t come from your retirement savings plan. It is also wise to avoid taking on new debts.
6. Stay Financially Literate
Don’t let your case be an “if you know, you know” one. Ask financial experts questions, so that you are up to date on how savings and investments work.
7. Watch How You Spend
It is possible that you earn a handsome salary, and so, you always buy whatever you desire. But, if you can remind yourself of the cliché, “Nothing lasts forever”, saving for retirement will be a priority for you.
8. Use Cash Gifts and Work Bonuses Wisely
It is not a bad idea to use money gifts or a salary raise to spoil yourself. After all, it is free money. However, “don’t eat with all your ten fingers”. Put a portion of your extra cash into your retirement savings. That’s part of spoiling yourself too.
9. Build an Emergency Fund
You should not be caught, “robbing Peter to pay Paul.” Try not to withdraw from your retirement savings to bail yourself out of an emergency situation. Instead, open a separate emergency savings account where you stash away at least, three months of your salary. Expenses like hospital bills, car repairs and so on, can come up at any time.
10. Dig out A New Source of Income
To be honest, depending only on one source of income to serve all your financial needs – including savings and investment – is like pouring more water than your garri can hold. You could maximise your weekend to earn an extra income from a hobby or skill. You could even earn extra income passively, like investing in a profitable start-up so you get returns while you sleep. This will give a significant boost to your savings and your pocket.
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