Finance

How to Prepare Financially for Retirement

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Everyone knows what retirement is supposed to be about: relaxing, travelling, and just generally enjoying life without the constant obstacle of having to make a living. Unfortunately, with today’s economic landscape, retiring happily isn’t always achievable – at least, not at the age you might like. More than ever, it’s crucial for an individual to prepare themselves financially for their retirement. Here are some tips for doing just that.

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Define Your Expectations

Even if the foundation of retirement is the same for everyone, we all have our own specific vision of what our ideal post-work lifestyle would look like. Whether your expectations are glamorous or peaceful, whether you dream of retreating to your hometown or roaming the world, it’s important to come to terms with what your exact expectations of retirement are. Knowing this will enable you to develop a rough idea of the kind of budget you’ll need to plan for when retirement comes around. For instance, someone who wants to retire quietly to the countryside and play golf several times a week may not need to plan as ambitiously as someone who wants to visit a new country every six months and have a beachside house to come home to.

Set Goals… Now

There’s no sense turning 60 and suddenly deciding it’s time to plan for retirement-at-65. To maximise your chances of achieving the lifestyle you desire after your working life is over, you need to start setting goals and achieving them as early as you can. These goals can include financial milestones you want to reach, which you might be able to achieve quicker by contributing extra into your superannuation. For example, if you have an approximate idea of how much you’ll need saved up before you say farewell to the workforce, you can set a target savings amount for every five years that will comfortably take you to that final figure.

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Make Your Money Work for You

If you’re already working full time and contributing to your super, you’re doing everything you can for your retirement, right? Wrong. As soon as you have enough money to do so, start looking at how you can invest. Investing is one way to help you reach those milestones on the way to retirement.

Depending on your preferences, you could invest in the stock market, mutual funds, or real estate. Either way, doing so should help you accrue more funds that you can use to benefit your future self. With a flexible home loan, such as a BOQ Clear Path Home Loan, you may even be able to afford an investment property that can double as your ideal retirement residence – check the current home loan rates online to see if this would suit your current circumstances.

How have you started preparing for your retirement? With these tips – plus any others that you’ve picked up elsewhere – you will hopefully be able to retire comfortably and at an age that gives you plenty of years to enjoy the work-free lifestyle. If any of the other tips you’ve come across could benefit someone else reading this, please be generous and share them in the comments section below.

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Derek

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