The best time to plan for retirement is when it’s still decades away. The start of the year is the perfect time to make sure everything in your financial life is in order.
This post is going to be pretty general as the rules and details of pensions, superannuation or 401Ks (or whatever your country calls them!) are pretty varied depending on where you live in the world. I’m going to keep this post pretty short and sweet so it applies to most readers regardless of their location.
1. How much money, honey?
Consider how much money is going into your retirement savings at the moment. Are you making any contributions on top of your employer’s contribution? In some countries employers will make a higher contribution to your retirement savings account if you make a higher contribution yourself, so you could essentially get free money into your account for putting in more of your own hard-earned cash.
2. Think about the taxman
Did you know that in many countries there are tax advantages to contributing to your retirement savings? This makes it particularly appealing to up the amount you’re saving for your future retirement. Check the rules in your country regarding tax benefits and contributions.
3. How many accounts is too many?
If you have multiple retirement accounts from different employers, consider consolidating them. You don’t want to lose track of them, or end up paying more than one amount of fees. However, check each individual provider, to ensure that you won’t miss out on benefits from one by consolidating it into another.
4. Assess the risk level of your account
Sometimes risk is a good thing. If you’re in your 20s or 30s and retirement is still decades away, having a higher risk rating on your account could mean more money for you in the long run. Often your provider puts you in a default investment account that may be too low risk for your age. Financial advisors typically advise young people to take on more risk, and then switch to lower risk investments as they become closer to retirement age.
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