It’s important to start planning for retirement, the earlier the better! But if you haven’t started, it’s not too late to come up with a plan.
As we grow older, change careers or industries, we always have an underlying question at the back of our minds; when is the right time to start planning for retirement? To most people, the answer is usually when you are late into your career. I mean, who needs to think about a retirement plan in their 20s? Most of us think retirement is a topic that should be left for the old. But in real sense, the right time to start planning for your retirement is yesterday, regardless of your age or social class. Today is neither too late to start if you haven’t come up with a plan yet. Retirement needs to rank top of anyone’s list of priorities.
Often than not, most people think that by working for 30 or so years they will be able to save lots of money that will cater for their retirement. Unless one owns a multibillion dollar business – the likes of Bill Gates or much closer home, Aliko Dangote – this is always almost impossible to achieve. No one wants to work all their youth and not have anything to ensure they comfortably enjoy their retirement. Some organizations have put in place retirement schemes for their employees. Such schemes require employees to contribute a certain amount monthly which goes into their retirement savings plan. In Kenya for example, the Retirement Benefits Authority (RBA), was enacted under the Retirements Benefit Act. One of its mandates is to create awareness on the retirement benefits sector.
What measures can you take to ensure you start saving for your retirement early?
1. Retirement savings assessment
Whatever measures you take to secure your future, you will always need to assess and analyze your input as well as your output. Simply put, is what you are contributing going to be enough when the time comes for you to retire? How much have you been able to save so far? If what you have saved isn’t enough do you need to start saving more money? By assessing all the options you have enables you to put in place measures that can help you be on track on your retirement savings plan.
2. Higher salaries mean higher taxes
The higher your salary the higher your taxes tend to be. This definitely becomes an issue that can easily affect your savings plan and throw you off balance. However, you can still stay on track when it comes to your retirement savings contributions. How can you do this? You ask. By finding ways to supplement the extra money you need to save. You can find side hustles that can enable you to earn a few extra coins that can go into your savings. This way you won’t have to go months on months without paying your premiums.
3. Company retirement benefits scheme
If you find it hard saving money once it hits your account but your organization offers a retirement benefits scheme, you should consider being part of it. By being part of this scheme, money will directly be deducted from your salary to your retirements savings account based on the percentage agreed upon by you and your employer. If, however, you feel that the savings percentage is low and you’d like to save more money, you can have a discussion with your employer or open multiple accounts to help you maximize on your savings.
4. Budget
Those of us with family or siblings to support can find it hard setting something aside that would be beneficial to us in the future. Still, not saving money for your retirement means that you won’t have a fall back plan when you retire. To solve this, you will need to evaluate your expenses and find ways of cutting costs. As mentioned earlier, saving for your retirement needs to rank top of your list. Coming up with a budget that is flexible and leaves you with more money to save can help you achieve your goals. No matter what your salary is, start saving today.
