Financial Goals for Happy Retirement
Building wealth for the future is the common objective of everyone but how many are serious with clear insights into the financial goals for happy retirement that they need to hit by a particular time. I myself used to think a lot about a happy retirement life but even up to the five years after getting my first job at the age of 28 years, I didn’t know – how much should I save in five years or ten years or what the objectives should I save for or what are my financial priorities? Although I started late to have satisfactory financial status by the age of fifty, today, I am a financial stress-free British self-employed professional. In this write –up, I take the liberty to share my experience based seven factual tips to hit the self-set financial goals for a happy retirement.
1. Set Your Financial Goals:
Building wealth for a happy future is consistent process; you can’t create it just by knowing ‘how much should I save in five years or ten years’ or ‘what the objectives should I save for’, in addition, you need an approach also. Setting own financial goals needs time and efforts with insights into the retirement period, the probable future requirements and possible odds. The financial goals should be ‘SMART’ – Specific- Measurable-Achievable- Relevant- Timely. According to a recent survey, retirees spent around £2,200 per month / household.
2. Know Your Start- Up Position:
How you will proceed, in which direction you will proceed and at which speed you will proceed, depends upon the startup position. When should you start saving for a stress-free retirement? Simple answer – as soon as you can start. Assess your current savings, remaining debts, investments and monthly living expenses. According to a financial adviser at Salisbury House Wealth, a 24-years old household with just one year in a workplace must have saved £7,348 regardless of monthly repayments.
3. Create a Realistic Budget:
Manage ins and outs of income to proceed at a determined speed to hit the financial goals within a set period. Use this budget frame to plug the leaks in the financial ship. Remember, the living expenses are variable figures with a high possibility to jump because of various factors; therefore, take a cushion for the increased monthly budget. A report, released in 2018, states, ‘millennial of 20 to 30 years age must have £73,500 saved if they wish to enjoy stress-free retirement’.
4. Organize and Monitor The Progress:
OK, you know the goals, you have the ball, you have started also to hit your financial goals but you need to be organized in the right direction; here, comes the role of regular monitoring also. Organizing yourself and monitoring the progress are two different aspects for a happy retirement with adequate wealth. The numbers of free to use budgeting tools and apps may help you stay on the track despite facing some difficulties.
5. Keep Emergency Funds:
OK, you are progressing steadily and fast to hit the financial goals but certain emergencies appear to take you off the track; it happened with me many times during the fifteen years period. For example, I suffered will illness, remained jobless for almost eight months, relocated because of job switchover, borrowed for unexpected financial emergency etc. To keep your savings remain on the track, you must set emergency funds separately.
6. Review the Investment Accounts:
OK, you are investing for a bright future by limiting daily living expenses with good financial discipline but if you are not getting the best return on your savings, your efforts go waste. It is just like you are racing towards a goal post but the opponent team player is not letting you move forward despite your best efforts and skills. Reviewing your return on all the investments is crucial. The interest rate and overall gains keep on varying in saving plans; therefore, keep your savings on the right and risk-free track. A report over Independent dated 26 February 2019 states that if we assume an inflation rate of 2.5 %, a British household needs a saving pot with £323,000 worth at retirement age.
7. Avoid Borrowing & Trust More On Benefits:
Borrowing in the UK from private lending agencies is an easy task for almost anyone irrespective to eligible qualifications. Some lending agencies such as British Lenders offer bad credit loans even to jobless people or no guarantor loans to small business owners in the UK. A payday loan is the superb example of borrowing at the most ease. But, the statistics are eye-opening. For example, I myself borrowed £ 10000 as a short-term loan for unemployed @ 22.6% interest rate, while I was eligible for job seekers allowance with long-term repayment and less interest rate benefits. I hope, you will not commit the same mistake.
Is it practically possible to follow the above mentioned factual tips? Yes, you too can do it. Just have a look over your roadmap:
- Use the pension calculator to determine likely retirement income
- Be committed to your retirement saving plan
- Develop skills to improve monthly regular income
- Live below the means in hand
- Set the financial goals in three categories- short-term, mid-term and long-term
- Keep up National Insurance contributions and pension contributions
Retiring financial stress-free is a pipe dream for the most but making this dream come true needs regular saving with strategic approach. The numbers of British households fail to hit the well set financial goals because of having the debt; therefore, living debt free should be the priority.