Retirement doesn't have to mean an end to the passions you're used to exploring. In fact, with the right wealth planning and investment tools, retirement can bring with it a whole new vista of opportunities for you to pursue the lifestyle and aspirations you've always wanted. Here are 8 steps to help you plan better and take charge of your retirement:
1. Start early
Time is your greatest ally. The earlier you start investing for your retirement, the greater your returns will be.
2. Understand yourself
Having clarity on when you hope to retire and the lifestyle you want is the first step you need to take in planning for life after work ends. What returns do you expect from your investments? What do you hope to achieve during retirement? Factor your risk appetite into your planning and incorporate some flexibility to convert assets into cash quickly if the need ever arises.
3. Determine the funding you'll need
When you retire, it's likely you'll need at least 60% of your last-drawn salary to maintain your living standards. In mapping out your financial planning, consider how much you would need on a monthly basis for at least 20 years after retiring.
4. Consider how much you have to invest
Bear in mind that savings and investments are different. Traditionally, savings can earn you interest and allow for little risk to your capital, while returns for certain investments may vary from high to zero. Even though investments could earn you potentially higher returns than savings, there is also a risk you could lose your capital, so consider that when you set aside funds for investing.
5. Understand the products you're investing in
Find out as much as you can about the product, including whether the investment is a good ﬁt with your overall portfolio, or whether you can alter/sell if your needs do change.
6. Put your nest egg into different baskets
Diversifying your investments across different assets, including equities, bonds, structured investments, unit trust funds, property and insurance, is never a bad thing. By doing so, you may possibly balance out potential losses in one investment with gains from another.
7. Balance out the highs and lows
Your money will buy more units when prices are low and fewer when fund prices are higher. Dollar cost averaging, or making smaller investments at regular intervals, helps reduce the risks that come with locking in your investments at a specific price.
8. Get professional financial assistance
Start your retirement planning by making an appointment with your Relationship Manager and put your retirement plan into action.
After a lifetime of hard work, retirement truly brings an age of being able to do the things you've always wanted to pursue, now that you finally have the time and freedom to chase those aspirations. Your dream retirement lifestyle doesn't have to merely be a dream - you can turn it into reality by actively taking these steps to plan for your golden years.