How To Take Care Of Your Future Right Now September 16, 2015Featured, My LifeOff

We all know the future isn’t written. And we also know we can’t predict what is going to happen next. But we can make arrangements to ensure we are financially secure later in life. Of course, nothing is guaranteed. But making sound judgments now with our money can provide a comfortable income. This could secure a better quality of life in our future.

Most employers deduct a percentage of our pay to invest in a pension fund. It may be unwise to opt out of this scheme. It would also be unwise to rely solely on a company pension for financial security in retirement. Instead, make the most of your regular income now. Invest it wisely and reap the rewards later on.

It’s not as tricky to do this as you might think. You might want to speak to an independent financial adviser. Do this regularly to determine the best options for your personal circumstances. But you needn’t go into this without a clue as to what to do next. Instead, start to think about how you want to live when you no longer want to work for a living:

How Old Will You Be When You Retire?
This is one of the first questions you will be asked when you take out a mortgage, pension plan, or investment opportunity. It’s tricky. State pensions are no longer a certainty. Don’t judge your retirement date based on the state pension age. Instead, think about when you might reach the point of needing to stop work.

Physically, the body will tire more easily, and become damaged more easily after the age of fifty. By the time you are sixty, other physical signs of aging that might impede your ability to do your job could be present. Hearing and sight will become less acute. The mind can also be less sharp once we pass our sixties. Wanting to give up work is something we can only be sure of at the time we make the decision.

Who Will Be Dependent On You?
The later you retire, the older and more independent your children will be. Retiring early may put financial pressure on you to support their education and fund their first home. If you have a spouse without a pension, you need to make sure they are cared for if you die first or become infirm.

Where And How Will You Live?
Many people dream of living in a gorgeous house in the country one day. If this is your dream, how are you going to achieve it? Will the house be paid off in full by the time you have retired? What will it cost to live comfortably in this particular property? Will you need a cleaner or a gardener? There are lots of things to consider for the life we don’t yet know.

What Will You Do With Your Time?
The point of retiring is to stop working. But many people need to fill those hours in other ways. Perhaps you will want to take some vacations or travel. There is every chance you will take up a hobby that could be quite expensive to keep up. If you are a car enthusiast, you might want to spend your time at car rallies, or driving. All of these pursuits will cost money. You will need an income to support the lifestyle you want when you retire.

 

Most pensions pay out a lot less than the annual salary you are currently enjoying. Some pensions can be worth less year on year if they produce a fixed sum per annul. To supplement your pension and secure your future, you need to think bigger than just a pension. Investments and savings may be key to providing the income you want to enjoy when you are no longer employed.

There are plenty of things to invest in right now. Gold coins, property, stocks and shares are all viable investment opportunities. The value of such investments will fluctuate over time. As you hold onto them, the hope is that they will increase in value. You might then sell them when you retire or re-invest to provide an enhanced income in retirement.

If you have money now, then use it to create the income you want when you retire. Many of us want to retire early, but the reality of not working when we are still of working age is different than we might expect. Aside from the boredom and other psychological issues, it often isn’t financially viable to let go of a salary when we are still young. Instead, invest as much of your salary as you can comfortably afford. A good investment will reap great rewards.

While there are many different places to invest your money, you might be tempted to put all your spare cash in a single fund. This can be risky. If that fund flounders or suffers during an economic downturn, you could lose everything. Instead, look to invest in several different places. Diversification helps you protect your money. You might put some in gold, some in a pension fund, some in a savings account and the rest in a property investment. Speak to a good financial adviser about the options most suited to your circumstances.

One of the most important things to have in your future is secure accommodation. Investing in property can make you money, but it also provides a much-needed roof over your head. Once your future children have left home, you may want to downsize. Cleaning and getting around a large house when you are elderly is a challenge. If you are infirm, you may prefer to be in a care home. How will you fund this? There are insurance plans out there to help, but you will have more choice if you have the capital behind you.

Once you have determined what you need in life in the future, you can work out how much you need to put away now to achieve it. It may be more costly than you expected. But making the sacrifice now to secure an uncertain future is a worthwhile exercise. Take care of you.

Photo by Sophie James | Shutterstock

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