This month we will celebrate our Human Rights Day and we can all be grateful for the efforts of those who faced such hardship in the past so that today we are all deemed equal and can boast one of the best constitutions in the world.
This constitution gives us all basic fundamental rights and one of these is an equal opportunity to earn a living. No doubt we all believe that we have the right to live and retire with dignity, but unfortunately, come the day of retirement dignity will not pay the bills. Yes we will receive some sort of pension or grant but that is barely a living wage, so living well in our old age is a privilege and not a right.
Here are a few practical steps to ensure that your retirement is a pleasure and not something you regret – or may never even be able to take!…
Take the first step now! – The first step is to take the first step as early in life as possible. Retirement benefits work on the principle of offering you large returns because they are long-term investments which enjoy the benefit of compound interest.
Even if you are just starting out – or feeling the pinch financially, this is not something that can be compromised and you should put as much as you can into a good retirement plan right away.
Determine your situation – If you are an employee, most companies, particularly larger ones, allocate a portion of your salary towards a group pension fund or a Retirement Annuity (RA). There are significant benefits to this. Just make sure that if you change jobs you are not tempted to draw the pension too early. Rather continue to invest in it, particularly if it is a RA.
As an Entrepreneur, you have to ensure that you set up your own pension plan and your Financial Advisor will usually include this in your portfolio. The best is a RA which gives you significant tax savings too.
Be sure you can’t draw! – As aforementioned, don’t draw too early even if you can. Most pension funds do not allow you to draw too early and this is why investing in a pension fund is better than just saving for retirement with something like unit trusts.
Focus on the dream – So what do we all dream of? Early retirement and the financial freedom to enjoy it to its maximum. Don’t lose sight of that and if you are hesitant to start, or tempted to draw too early remember why your retirement is important.
Increase your investment when possible – It wouldn’t hurt to add a little more to the pot whenever you get a bonus payout or some sort of windfall. Spare cash can so easily be wasted on short-term gratification, but constantly remind yourself that you are going to need significantly more money than you earn now to live even reasonably well 20 years from now!
Work with the professionals! – Good Financial Advisors assist you by ensuring that you maximise whatever you can manage to save from your income and this would include a good pension or retirement plan. They will also ensure that the wealth you build is protected by having the right insurance covers in place and creating a structured financial plan that gives you flexibility and growth potential.
Hereford Group is proud of the quality and expertise of every one of our Financial Advisors so contact us today for a no-obligation consultation and let us set you on the right path to ensure that your money has earned you the well-deserved privilege of living well in your old age!