While it’s ideal to start saving for retirement early, life doesn’t always go according to plan. Maybe you had to prioritise other financial goals, deal with unexpected expenses, or simply didn’t have retirement on your radar.
No matter the reason, it’s important to remember that starting late is still better than not starting at all. Here are a few strategies to help you kickstart your late retirement savings plan.
Reassess your financial goals
As a late saver, your first step is to clearly define your goals. Ask yourself what kind of lifestyle you envision in your golden years. Do you imagine travelling the world, relocating to a quieter location, or simply maintaining your current lifestyle? Your answers will determine how much you need to save.
Create a budget
Once you’ve defined your realistic retirement goals, the next step is to reshape your budget to prioritise saving for retirement. Any opportunity to save is crucial. By reallocating funds from non-essential expenses to your retirement savings, you’ll start boosting your nest egg, with the extra power of compounding returns. The longer your money stays invested, the more opportunity it has to grow, because the returns you earn are reinvested and earn returns of their own.
Increase your retirement contributions
For late starters, stepping up contributions to your retirement accounts can be an effective catch-up strategy – as long as it doesn’t strain your current budget. If you’re employed and have the financial capacity, consider increasing your contributions to your KiwiSaver account or any other retirement savings plan you may have, depending on what’s right for you. Remember, the more you save now, the more financial comfort you’re likely to enjoy in your retirement years.
Consider delaying retirement
While the idea of working longer may not sound appealing, delaying retirement can significantly bolster your retirement savings. An extra few years in the workforce not only gives you more time to contribute to your retirement funds, but it also allows your investments more time to grow. Plus, pushing back retirement means your savings will need to stretch over fewer years, potentially providing you with more financial comfort during your retirement.
Seek professional financial guidance
The journey to retirement can be complicated, especially for those starting late. Engaging a financial adviser – like us – can provide you with the guidance and expertise you need to navigate your unique situation. We can help you understand your options, develop a tailored strategy, and keep you on track towards achieving your retirement goals.
Remember, the best time to start saving for retirement was yesterday. The second best time is now. Get in touch to get started.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.