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Is it Too Late to Start Saving for Retirement?

Our financial advisors in Johannesburg provide expert financial advice and comprehensive financial planning services, including retirement planning.

We believe that retirement planning is easily the most important component of any financial plan and the sooner you start saving for your retirement, the better.

However, we often get asked “how late is too late to start saving for retirement?” The simple answer is that it’s never too late. No matter how late you start saving, or how much you save, every bit counts towards a more comfortable retirement.

If you are concerned that you have not saved enough, or you have started to late to save and plan for your retirement, this article shares some tips on how you can boost your savings for a better retired life.

saving for retirement

How to Boost Your Retirement Savings

Just because you have started saving a bit later than you had hoped, it doesn’t mean that you shouldn’t start saving right away. Here are some useful tips on how to increase your retirement savings.

Cut Back Wherever You Can

Cutting back on unnecessary spending is one of the most effective ways to save your money. This is often the first tip that we give to our clients who want to know how to save more – spending less means you can save more.

The only way you will know where you are spending more money than you should is by creating a monthly budget. Start by recording what you are spending your money on and use that information to set out a spending plan for the months ahead. Once you get a visual of how much you are spending your money and where it is going, you can figure out where to cut back.

We find that most of our clients spend more than they realize (and more than is necessary) on things like clothing, entertainment, and luxuries. You may find that you could get away with spending up to 50% less on these things but reducing these expenditures by even 25-30% will be immensely helpful.

Wondering how to commit to saving this money? Set up a stop order which automatically deducts your decided amount and puts it into a fixed savings account. That way, you cannot be tempted to spend that money and will learn how to make it through the month with the money you have available to you.

Get a Side Hustle

Side hustles have become normal. In previous years, having one job and sticking to it was a normal thing to do as the rate of job security was much higher. Additionally, living expenses were lower, and interest rates weren’t sky rocketing.

However, in today’s economic climate, with less job security and higher living expenses, having one income stream often doesn’t cut it and people are turning to side hustles to supplement their existing income.

You could consider getting a part-time job over weekends or turn your favourite hobby into a small business on the side. That way, you can still do something you enjoy and use it to make some extra money which you can put straight into your retirement savings.

Pay Your Home Off

Bond repayments make up a substantial portion of your monthly expenses and paying off your home can take decades. However, if you can, you should try to pay it off sooner rather than later.

This may sound like an impossible task, but even if you can manage an additional two or three thousand rand a month, you can shorten your repayment term by a few years. Having a house that is paid off before you retire means that you will not have to dig into your savings to continue paying off the home you are living in.

Additionally, if it becomes necessary, you can sell your home before you retire, buy a smaller home cash, or move into a retirement home or community and still have a large sum of money as a nest egg to fund your years of retirement.

Push Back Your Retirement

We know this is not something everyone wants to hear. It’s also not always possible to retire later when you work for a corporate company where the standard retirement age of 65 is applicable.

However, if you are in the position to continue working passed the age of 65, you can save a substantial amount of money for when you do eventually retire.

Work With a Financial Planner

Many people wonder about the value of working with a financial planner. Unless you are a financial wizard yourself, it can be challenging to know and understand the world of finance, saving, and investments.

Financial planners can offer you sound advice and guidance, ensuring that your portfolio is not only diversified, but works for you in the most efficient way possible. Financial advisors are trained to identify valuable investment opportunities and can guide you through stressful decisions. Working with a financial planner on your retirement plan will help you prepare for your retirement, ensuring you have everything you need to live a full and happy retired life.

Olemera Financial Services – Financial Advisors in Johannesburg

Our financial advisors in Johannesburg strive to help you make all your financial goals, dreams, and aspirations a reality.

Speak to us about retirement planning, saving, investing, and all things related to your personal financial plan.

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