A lot of planning and committed need to achieve a sound Financial security during retirement. Remember savings matters a lot, in-turn it is the Money !!. You should have the habit of saving.
• Plan your Goal and start saving. If you have the habit of saving being it for retirement or for otherwise keep continuing! Saving is a rewarding habbit. I would say we must start the habbit of savings from childhood. Children should be educated on the benefits of savings. Parents can reward the child when she/he achieves a certain amount of savings. By this Children are motivated to save more. If you have not started yet to save for retirement it is the time to start never it is too late. Don’t delay! Retirement saving should be your priority. Develop a plan with goals and stick to it.
• Identify your retirement needs. Key to a secure retirement is to plan ahead. Retirement is costly. To maintain your standard of living when you retire you should save a fare amount of your current income. Due to the inflation and cost of living going to increase in future years you should factor these also when planning the amount to save each month.
• Join your employer’s retirement savings plan. Sign up for the retirement plan offered by your employer. SAYE Save as you Earn. In some organisations the percentage of contribution to these schemes can be chosen by the employee. It is recommended to choose the appropriate percentage keeping in mind your monthly expenses. Advisable to choose the highest percentage offered. Thoroughly study the plan is on offer. With the compound interest and deferred tax make a huge difference in the cumulative amount.
• Follow basic investment principles. Know about the investment options and identify the high yield return options. Always diversify the investment options, there is a saying ‘Don’t put all the eggs in one basket’. This saying is more appropriate in retirement planning. Invest in different investment types which not only improve the return but also reduce the high risk of investing in a single plan. Investment mix change over time depending on the age, period and the goals. Security in retirement plan is utmost important factor.
• Don’t Withdraw your retirement savings. Always refrain from touching your retirement savings. Prevent from doing that mistake! If you happen to do it once there is high chance that you may repeat the same mistake. By a single withdrawal you may loose the tax benefits attached to it.
• Join a Individual Retirement Account. Join a Individual Retirement Account (IRA); you can contribute up to $5,000 a year. This can increased when you are 50 or older. IRA’s provide tax benefits Tax benefit varies with the option you select. You can issue a standing order to your bank so amount for IRA is directly transferred without you forget to send to IRA.
• Know your Social Security benefits. Social benefits varies country to country. Find out from Social Security Administration’s Department. Else you can also check out with your salary division or HR (Human Resources Department) of your company.