Tips to help you prepare for retirement planning

Retirement planning can be challenging, so here are a few suggestions to get you started.

07:09 07 January 2014

Retirement can creep up on you and before you know it your income is fixed and perhaps even lower than anticipated. 

 

Here are a few tips to help you get finances sorted before retirement. 

 

• Debt — first you will want to address any debt you have. If possible begin to pay off smaller debts to free up more cash flow in your budget. If you still owe on a vehicle or a home, send in as much extra as possible. Even if it is not much, it will help reduce the amount of interest that you pay over the course of a few years.

 

• Budgeting — once you have paid down some debt, or become debt-free, make sure to save for the things you want or need. It is easy, especially once you are debt free, to begin using credit cards because you will have enough to pay them off each month. Unexpected circumstances can often throw a wrench into those plans and land you with more debt.

 

• Investments — you should try to invest money as soon as possible. This should be in addition to any pension plan that an employer offers. This is also a great time to begin thinking about drawdown and annuities. If you know what you would like to have for retirement, you will have an idea of how much money you want at the end of an investment period, and how much you will need to initially invest.

 

• Advisors — professional advisors can help you set a successful retirement plan that you can appreciate. 

 

To avoid potential financial pitfalls, start planning for your retirement years as soon as possible. The longer you save, the more money you will be able to have during your retirement years, and it will cost less per month to save than if you wait until closer to retirement.