As much as retirement often seems far away for many of us, especially younger individuals, it is important to prepare in advance to make sure you have a retirement income when the time comes.
“More often, people only start to think about their retirement when they are five or ten years away from it. This is too late. Ultimately, individuals should start to think and get the ball rolling as soon as they start working. This will allow them to be better prepared to get the most out of their retirement,” says Rita Cool, certified financial planner at Alexander Forbes. Here are steps to help you prepare for and take control of your retirement:
Take control by understanding your situation
It is important to know where you spend your money and what resources you have. Start by making a list of expenses and debt payments. Then make a list of household income and any savings that you have.
Take control by asking what you can change
Review your expenses in detail to find out which expenses can be reduced, delayed or stopped.
Take control by planning
To take control, you need to work out how much you will need going forward each month. Also, it would be good to spend some time thinking about which expenses may increase, for example medical expenses.
Take control by being proactive
Once you understand your financial position, you can start planning for when and how you will reduce, delay or stop any non-essential expenses. Consider taking other necessary actions to ensure that your money stretches as far as possible and for as long as possible. A financial adviser can assist you with this step.
Stay on top of your finances by recording expenses
Now that you have a budget and a plan, you must compare your expenses to your budget every time you spend money and remember to check your plan every month and adjust if need be. “By starting this good habit, you will be using this opportunity to put yourself in a better position to achieve what matters most to you. A financial adviser can help you with your financial plan,” Cool concludes.
PERSONAL FINANCE