Create a Retirement Plan in 7 Easy Steps
Are you interested in a retirement plan? Are you thinking of putting your money in a self managed super fund? Just six or seven years ago all you had to do was put your money in indexed investments. The market forces would eventually cause your investments to double. Due to the global recession, things aren’t so simple any more. Nowadays, you have to rethink your entire retirement strategy.
Creating a retirement plan doesn’t have to be difficult though. You just need to know which steps to take. Here are seven retirement strategies to help you get started:
1. Compare Various Savings Options
Don’t settle with just one source of income. Online tools will help you compare multiple savings and retirement plans at once. What is the interest potential? How financially stable is the institution?
2. Consider Hiring A Professional Investment Manager
Chances are you will need assistance. Yes, investment managers cost money, but they can help you save a lot of money in the long run. Let them do all of the hard work so that you won’t feel as much stress. If you are managing your own self managed super fund you should consider a SMSF audit to make sure you are doing everything properly.
3. Save As Much Money As You Possibly Can
Your savings will make up a significant portion of your retirement income. Try cutting out unnecessary expenses. Do you really need to order take away every week? Do you need to subscribe to that magazine? You can either waste that money or put it in a savings account through which you can earn interest.
4. Diversify Your Portfolio
Not only should your income come from more than one source, it should also come from a variety of different sources. This way, you can secure your financial well-being in the event that something happens to one of your plans. If you have all of your money in one plan, and that plan goes under, your finances will suffer. Ideally, one of your savings options should be SMSF (Self managed super fund).
5. Make Sure That You Have Good Life Insurance
If you plan on leaving an inheritance to relatives, then your retirement portfolio should include a life insurance plan. You don’t have just your own future to worry about, but your family’s as well.
6. Have Realistic Expectations
Save more money than what you think you will need. It’s a common myth that after retirement, your annual spending will only be 80% of what it was previously. This is generally untrue. Since you’ll no longer be working, you’ll have 20 – 40 more hours a week to shop, travel and attend sporting events.
7. Increase Your Contributions Whenever You Get The Chance
If you can afford to do so, increase your contributions annually. This will create a significant increase in your retirement balance. Over the course of your career, your salary should increase. As it increases, so should your savings contributions.
If you follow these steps, you won’t have to worry about retirement. Everything should fall into place and your future will be financially secure.