Whether retirement is something that you are looking forward to or not, the fact remains that we all eventually must retire.
Understandably for some, retirement can seem daunting as running out of money during your retirement years is a realistic concern. None of us know how long we will live for so planning as much as possible during your working years is key to ensure you are able to enjoy your retirement as much as possible. With proper budgeting and planning, financial freedom during retirement can be attainable. Here are just a few things that you can do to make to make that happen.
Monitoring both your current expenses and the performance of your pension to ensure you are getting good returns on your investment are a couple of things to consider doing during your working years that will prove beneficial once you retire. Of course, you want to be able to enjoy your life as much as possible but finding a suitable balance between saving for your future and enjoying the now is key. When I meet with clients and ask them about their current pension investment, a good portion of them are unsure. They can remember signing initial enrolment paperwork, but that is about it. It is so important to monitor the performance of your pension during your working years to ensure you are maximizing your potential returns as much as possible. Voluntary contributions through your employer or setting aside money in a supplemental retirement plan or investment account is also a fantastic idea.
I have seen an influx of young people over the last year or so who are looking to save for their future. Whether it is because they see the struggle of their own parents or family members, I commend them for thinking ahead. The earlier you can start to save the better. As you age, your expenses start to increase so being able to provide yourself with a good financial head start is essential. As pension only became mandatory in Bermuda in the year 2000 unfortunately, some people are retiring with much less money in their pension account then they need.
If you are fortunate enough to own your home, in a lot of cases that is your largest asset and therefore using it during retirement may be an option to consider. You could potentially rent out your home and use the rental income to help fund your retirement. Alternatively, if you will still have a mortgage once you retire, work until it Is paid off if you have the option to do so; or consider selling it and purchasing something that you would own outright. Having a mortgage during retirement could be financially catastrophic if something unexpected occurs.
You should also consider the difference between private and government healthcare. While private healthcare is more expensive than government, depending on your individual needs it may be your best option. Considering that cost into your future planning is essential.
In summary, at Freisenbruch-Meyer we feel these tips are key factors to ensure you are ready for retirement. And that you can enjoy these years financially free.