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New Year Older You: Plan for a Financially Secure Retirement

by Lou-Ann Jordan Mar 4, 2024

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Findyello article on how to plan for a financially secure retirement with an image of a couple reviewing plans and saving.

Ideally, it’s prudent to start planning for retirement as early as possible, but sometimes this is not possible due to various circumstances. Although you may think you’re behind in planning in your 40s, don’t be dismayed. It’s best that you get started now.

Your 40s are an excellent time to start making financial decisions because chances are you’re no longer trying to figure out where you want to go in life. You’re thinking is clearer. You have a better grasp of who you are, what you can do, and what you want.

With all the changes we experience as we age and the anxiety that can accompany some of them, worrying because of our reduced income shouldn’t be one of them. You’ve worked very hard, and retiring should be your reward for that period in your life. A happy retirement, a time when you can finally relax and engage in activities you enjoy while tightening bonds with loved ones, requires preparation.

In our previous issue, we discussed changing what you eat, which can significantly affect your quality of life as you age. However, in addition to maintaining a healthy diet, there are other things you can do to prepare. Let’s take a look at five ways you can plan for a financially secure retirement.

Save! Save! Save! – We know it’s important to save, but for many of us, it seems impossible. Either you spend too much and have huge amounts of debt you’re still working through, or though debt-free, you believe your salary is too minimal. Nevertheless, you must sacrifice and put aside some portion of it. At this stage in life, saving shouldn’t be considered optional but necessary.

That said, creating a budget and plan can help curb spending and diminish debt. Check out our article on Debt Demolition as we cover several practical ideas that can help. Meanwhile, small salaries can be supplemented with part-time jobs or monetising talents. Another alternative is to attempt to negotiate a salary increase with your employer. Ultimately, the goal is to spend less and save more. Wave goodbye to extravagance.

Activate Other Sources of Income – We mentioned this above briefly but will explore it more here. Regrettably, some of us 40-something-year-olds do not have three times our salary saved—that’s the recommended amount. Rather than feel despondent, there are other ways you can bolster our income. For one, you can do an inventory of our skills and talents, and then determining their viability for monetising is an excellent option. You can activate other sources of income by offering these skills at a cost. The best part is that they can be done while maintaining our nine-to-five. This extra income can go towards your retirement savings.

Pay Attention to NIS – National Insurance (NIS) is a tax deducted from our earnings by employers. Among other benefits, it secures us a pension later in life. The monthly payouts are earned because of the contributions made during your years of employment. Usually, your employer deducts these from your earnings. In most instances, a specific number of contributions are required to qualify for a full state pension. Now is an excellent time to check your payment record, especially if you’re self-employed. You can also make voluntary payments to catch up. Also, keep abreast of any developments or changes being made to the scheme. For example, some countries have extended the pensionable age from 60 to 65. This change means that at whatever age one retires, they will not receive a pension until age 65. This development makes our first two points so important.

Consider Investing – Investment can seem daunting because it requires an expertise many of us may not have, but it shouldn’t be ruled out. Seek out a reputable financial advisor for guidance on investment opportunities. The aim is to invest in something that offers terrific dividends in the long term. You can also examine ways to expand your current investment portfolio.

Expand Interests – Now that we’ve got the major financial stuff out the way, let’s deal with other aspects of your well-being. Develop more interests. Recently, we looked at this in our New Year Older You: Five Hobbies You Can Start. Check out that article, as it does offer several terrific ideas. In addition to acquiring new hobbies, you can expand your current interests. You can strengthen your skills by dedicating more time and exploring new areas. The benefit of this is twofold. First, doing something you enjoy can be therapeutic, improving your sense of well-being. Second, refining your interests may present an opportunity to earn additional income.

Growing older is exciting! You can plan for the life you want, no matter where you are presently. Also, there’s a wealth of information you can access to guide you in how to do so—and we’re here to help. So, stay tuned to our next edition of New Year Older You, where we’ll explore travel tips.

Sources: AARP, Nerdwallet, and Rockland Trust.