It might still be years away into the future, but it’s never too early to start thinking about planning for your retirement. Retirement is your chance to experience the things you’ve always wanted to experience, and live comfortably, freely and with minimal stress.
Most people find that government-issued retirement benefits aren’t enough for them to retire with this level of freedom, which is why saving for retirement is such a good idea.
Knowing that you need to save and knowing how much to save are two very different things. You might need to save a bigger or smaller sum of money, depending on exactly what you want to get out of your retirement, as well as outside factors like where you live and at what age you’re planning to retire.
If you’re looking to save for retirement, the average percentage of income you should aim to save is around 10%. It’s recommended that you start saving as soon as possible, preferably in your twenties.
However, each person’s retirement is unique to them, and you’ll need to think long and hard about what you want your retirement to look at to know how much to set aside for your goals.
Determining a Savings Target
The first thing to do is decide exactly how much you want to save for your retirement. Think about where you’d like to live, what you’d like your lifestyle to look like, and any specific objective you’d like to achieve. Perhaps your retirement is your opportunity to travel the world, or move to a completely new location. Whatever it is, you’ll need to factor in the costs well ahead of time.
Your savings target might be a big number, but don’t let it daunt you. You’ll be able to save it up over a very long period of time, so you’ll never feel like you can’t realistically meet the total amount – and if you do feel that way, you might need to move your target down to something slightly more achievable.
Creating a Savings Plan
As soon as you have your target set, it’s time to put a plan in place, and take action. Create a special savings account specifically for your retirement fund. Then set up an automatic direct debit to take payments from your bank account to your savings on a weekly or monthly basis. You won’t even notice the payments coming out, and over time, they’ll add up to something substantial.
Try not to feel too pressured to save the required 10% for your retirement. While it may provide you with the best retirement lifestyle in the future, if you really can’t afford it right now, that’s fine. It might be that in a few years time, changes to your lifestyle or working situation mean you’re suddenly able to put even more than 10% of your income into your retirement fund. As long as you don’t neglect your retirement planning entirely, there’s no need to worry.