Make the most of your savings to fund your retirement plans and enjoy great retirement after several years of work. Often, saving for retirement can be a daunting task considering the expenses you get to incur while working.
There are no strict rules as to what percentage to save for retirement, when to save or where to save, but in this article, I will be sharing some great tips on how to effectively save for retirement. It’s never too late to start saving today and nothing is too small to save.
Below are simple tips on how to easily maximize your retirements savings and enjoy a great life after retirement.
1. Start As Soon As You Can
There is a misconception on when to start saving especially among Youths. Compound interest is a great way to grow your investment without hassles, earnings from this type of investments can be reinvested to maximize earnings.
For example, if you started saving for retirement at by 25 with just 1,000,000 (NGN) for just 10 years. At age 50, you would have roughly 13,499,981.59 using a 10 percent return. We oftentimes don’t do forecast to know the investment potentials and that is people don’t consider saving early enough.
2. Buy Real Estate
While many may be considered real estate investment to be overly saturated, there are still great ways you can make your real estate investment work for your retirement plans. Investment in real estate has been proven to be one of the smartest ways to save and invest at the same time.
Considering your budget and investment interest, you can either choose to buy real estate for commercial or residential investment. By commercial investment is having a property, be it land or structure for a commercial purpose that pays you back on fixed bases while residential is developing a property to be sold at a later date for a more higher price.
3. Set Up Automatic Investments
Automatic investments are great to increase your investment and build your retirements plan. Set up recurring investments from savings on complete autopilot and avoid stopping it abruptly.
Several financial services allow you to automate your investments and helps disburse the funds to the right investment channels to grow your money. The old adage of “pay yourself first” rings true here. If you can automatically save money before you get the chance to spend it, you’ll likely find yourself saving more than you ever thought possible.
4. Reduce Expenses and Invest The Difference
Reducing your spending is a sure-fire way to save for retirement. Let’s say you often go to the Cinemas like 2 times in a week, by reducing it down to just twice in a month for 2 most important movies helps you save the difference.
Imagine if a box of Pizza cost 5000 (NGN) and you eat roughly 4 boxes of Pizza in a month, that’s over 200k spent on Pizza alone. By cutting your Pizza to just 2 boxes in a month, you get to save about 100,000 (NGN) on Pizza every year and in 10 years, you should have about 200,000 on a 10% per annum interest.
Changes from the accumulated cut on small savings can do a lot for your retirement savings, it doesn’t have to be Pizza, take a critical look at several other unnecessary spending and cut it to save more.
5. Take Advantage of Cooperatives or Lightweight loans
Savings for retirement doesn’t come easy for everyone, let’s say you’ve been working for over 20 years and you just started savings in the last 5 years, that might not bee good enough to retire with.
Cooperatives associations exist to assist members with spare funds to achieve more. You can request funds from your cooperative associations to invest in real estate, complete your home project so you could stop paying rents or even buy stock options while you pay back with your salary.
There are other options such as Government Aid for selected few or lightweight loans. There’s never a late time to start saving for retirement.
Want To Get The Most From Your Retirement?
Saving for retirement can be a daunting task. If it’s a long way off, it’s easy just to have a mindset of worrying about it later. And if it’s close, it’s easy to think that it’s too late to save anything, so there’s no use in bothering to try to start saving.
Saving something even if small is better than saving nothing and you can never be too old or too young to start saving for retirement. Setting up an automation to help deduct from your account to a savings account sounds nice but having a real estate investment you can monitor its growth is a lot better.