So there you are, in your 20s, starting out in your working life with the world at your feet. You feel confident, full of get-up-and-go, and why wouldn’t you? You get back from working life what you put into it, but no matter what area of work you go into it’s worth thinking ahead into the future.
What you earn over the years and how you deal with savings plans will make a real difference in when you decide to retire.
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The Roaring Twenties
This the decade when you are establishing yourself, either as an employee or as an entrepreneur in your own right. Retirement? Who mentioned that? Yet it’s at this early stage that developing good money habits will put you in good stead in the long term. Good habits will become the foundation of your future financial life. A few tips:
- Every time you get paid, put money into a savings program.
- Keep track of your income and expenditure and don’t spend more than you earn.
- Pay off credit cards in full each month, otherwise don’t have a credit card if you can’t afford to do this.
- Avoid getting into debt – it’ll cost you a lot of money.
The Thrifty Thirties
Think about the extra financial responsibilities that can come with this decade. You may start a family, take out a mortgage, need insurances and thus have higher outgoings, although you should be earning more. Plan for an education fund if you have kids, give yourself a savings safety net for if things don’t go to plan for a while, and keep saving whatever you can into a retirement plan. If you’re employed and your employer makes contributions into a plan for employees, go for it – it’s free money and the earlier you do it the more you will get at the end.
The Fabulous Forties
Well, they can be, especially as you should be at your peak earning curve. But you also need to take care of things such as life insurance and appropriate income protection should things take a downturn. Watch out for your lifestyle expenses – they can creep up, and if you do have a problem they can be difficult to rein back. Keep developing your retirement plan – money goes out on utility, schooling and holidays so keep a tight hold on your budget. Sometimes some financial advice and support can be really helpful, so consider using contractor accountants to go through what you are doing and what you could do in the future.
Into the Fifties
Consolidation is your key here. Try to clear all your debts and continue to save as much as you can into your retirement plan or other financial portfolio investments. Check your life insurance coverage and if you’ve planned well your mortgage may be paid off, or close to it.
Savor your Sixties
It’s time to enjoy the fruits of your labor. Avoid financial offers that seem too good to be true – they won’t be – and relax in the knowledge that you have provided for yourself and your loved ones by continuing the good habits you started in your 20s.