Since we can’t predict what the future will bring, it helps to
start preparing for retirement early. When you’re in your 20s, it’s easy to
think you have all the time in the world to figure things out and pave the way
for financial security. That would be a mistake. It’s scary how quickly life
passes you by when you take it for granted.
Make the most of your youth by living mindfully, but plan ahead
so you can retire in comfort when the time comes. It doesn’t mean putting your
life on hold though. On the contrary. It’s important to live in the present and
make the most of each day, but it’s equally important to look at the big
picture and take small steps towards your retirement goals.
The trick is to start early and to have a clear idea of what
those retirement goals look like so you can take small, incremental steps
towards achieving them. Your goals might change over time, of course. If that’s
the case you just need to adjust your plan accordingly, rather than go back to
square one.
Whatever your goals are, here are 6 must-dos for all young
adults to include in their retirement plan to help navigate them through the
process:
6 must-dos to include in your retirement plan while in your 20s:
1. Set milestones every 5 years
Milestones keep you focused and motivated. Rather than working
towards a huge goal which could take 30 years to achieve (what an overwhelming
thought!), break it up into achievable goals so you can check them off your
list as you go. To do this, start by setting a ballpark figure for how much
savings you’ll need to retire comfortably.
Remember to factor in inflation. If you’re only in your 20s now,
things will probably cost quite a bit more 40 years down the line. That said,
keep it fairly realistic and achievable.
Tip: Work towards achievable goals
2. Allocate forced
retirement savings
If you don’t already, it’s imperative that you set a monthly
budget to keep track of your income, expenses and savings. If you’re not good
with discipline, make it a point to allocate x amount for your retirement
savings automatically every month. As soon as your pay comes in, transfer your
retirement savings into a separate account. You’ll be glad you’re doing this
once your nest egg starts growing.
Tip: If you don’t make it a priority, it won’t be
3. Have an
emergency fund
Life happens, and when it does, you’ll be glad to have a
separate emergency fund set aside. This prevents you from having to dip into
your retirement fund in the event of unexpected setbacks. It might take a bit
more effort on your part, having to allocate savings for multiple accounts, but
you can start with small amounts. Something is better than nothing.
Tip: Always be prepared for contingencies
4. Get a job with
retirement benefits
One of the advantages of early planning is the awareness you’ll
have of the issue, so keep your eyes peeled for job opportunities that come
with retirement benefits. Even if the hirer doesn’t mention it, it doesn’t hurt
for you to enquire about the possibility of having it included in your
contract. Don’t just assume they’ll say no.
Tip: Look at the big picture
5. Practice good
financial habits
It’s much harder to fix bad habits than it is to develop good
habits from the start. You don’t want to be burdened by a life of debts, so
keep a close eye on your expenses, particularly your credit card spending. It’s
best to pay off your bills in full every month and make sure you don’t spend
above your means, which is often the root of the problem. Don’t put yourself in
that vulnerable position. It’s just not worth it.
Tip: Avoid debts if possible (that includes credit card debts!)
6. Make Your Money
Work for You
You probably already know this, but the smart move is to grow
your money through investments. The most common ways to invest include mutual
funds, stocks and bonds, though there are various forms of online investing
available these days. If you’re new to investing, speak to a professional
investment consultant for advice and guidance. You don’t want to place your
hard-earned cash in the wrong hands.
Tip: Work smart, not hard. That includes your money too.
Don’t worry if you’re not making much at present. Start by
saving small amounts and your nest egg will grow over time, slowly but surely.
What matters most is to save a little each month rather than blowing all your
money on things you don’t actually need. It’s all about priorities.
What do you envision retirement life to look like? Tell us in
the comments section below. We’d love to hear your thoughts.
Sumber: https://www.jobstreet.com.my
