Retirement is something that we all look forward to however many of us are going into retirement without a plan. If you are planning on retiring within the next 10 years there are some things that you should do to make sure you can transition smoothly from working life to retired life.
Whether you are starting to plan for your retirement by saving money or planning on what country you want to visit next, during your retirement, make sure you do your research so that you are prepared.
Save early to make the most of compound interest
It is never too early to start thinking about your retirement and it is important that you start putting money away while you are young so that you can use the magic of compound interest to help you grow your retirement fund. Due to compound interest, the money you put into your retirement during your younger years is actually worth more than your contributions later on in life. This is due to something called compound interest. See when you are young and you decide to put money in investment it can grow to a very large amount due to the long time it has to grow.
Inflation can hurt your savings
Another important reason to contribute towards your retirement is that eventually, the purchasing power of money will be less than it is today. This is called inflation and it is a naturally occurring thing in our economic world. It makes the value of money, less over time. This is why it is important to invest in your retirement.
Medical expenses
It is important to prepare for your retirement because as we get older we are more likely to experience medical emergency expenses. Even though you may think that you are healthy now, that may not be the case when you get a little older. That is why it is essential that you start preparing for the increased medical expenses that come with retirement and old age.
Lots of time
When you retire, many people are not expecting all the extra time that they will have. It is true that jobs really do take up most of our day and when you no longer have to go to your job anymore, it can be quite a shock for most retirees. Some people that have recently joined the pensioners club often return back to work within two years after first retiring and often times this is not due to money issues; it is because people get bored. In order to prepare for retirement, you should make sure you have any hobbies or things to do so that you can spend your time doing things you love.
Travelling
If you are retiring and want to travel there are some things that you will need to make sure you do beforehand so that you do not face any unexpected surprises while you are travelling. The first thing to make sure is that you purchase a good healthcare travel insurance policy so that you will always be covered no matter what country you decide to visit. Another thing you will want to think about are your personal taxes and residency laws. Depending on what country you live in these laws will vary, but you will want to speak with a tax consultant that will be able to help keep you up to date on all the residency laws that can become an issue if you are outside of your home country for an extended period of time.
Create a budget
If you are about to retire one of the most important things you can do is create a budget. According to MyRetirementRehab, many people that retire face financial difficulties within the first three years of retirement because they are unable to manage their money properly. When you are on a fixed income it can be hard to make the most of your limits money and that is why a budget is an essential retirement tool. When you create a budget you will be able to create a plan for every dollar you receive so that you will never run out of money.
Employer and government pensions are not guaranteed
Another important reason to start saving for your retirement is that you never know what will happen in the future to social security, old-age pensions, and employer pensions. It is not uncommon for businesses to go bankrupt and if you work for a company that is not around later in your life your employer pension may be at risk. The retirement experts recommend saving approximately 10 times your annual salary by the time you are 50 years old. That may seem like a lot of money, but if you want to make sure your savings last you during retirement you will need to have at least this much saved by this point in your life.
Retirement is something that all of us look forward to eventually doing, however, it is important to make sure you are prepared so that there are no unexpected surprises when you retire. One of the most important things you can do to prepare for your retirement is to start saving money early so that it can benefit from compound interest. Also, make sure you are ready for all the extra time you will have when you retire. If you are about to retire soon, the best thing you can do is talk to other people that have retired to help give you tips on how to stay healthy during retirement.
