5 painless ways to catch up on retirement savings

Investment / Savings
Approaching Retirement
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If you are behind on your savings, these tips can help you get where you want to be.

Financial advisers always advocate the concept of starting to save as early as possible. The longer you are setting money aside, the more time you have to build up a savings pot that can sustain you once you stop working.

However, life’s many and varied events can often hamper an individual’s ability to assemble a large retirement fund, and many only end up being able to save at a later stage in their life. 

If you have found that you need to catch up on your retirement savings, then here are five top tips that will help you accrue as much money as possible to enjoy once employment ends.

1. Eradicate all debt
Debt can be a major stumbling block to financial health, particularly if accompanied by a high rate of interest. If there are no early redemption penalties and the interest is high, it is usually advisable to focus on reducing the loan(s).

2. Pay yourself first
If you leave transferring to your savings accounts until the end of the month i.e. saving only that which remains from your previous wage packet, then you won’t succeed. Set aside a set amount at the start of the month and plan to spend what’s left, not the other way around.

3. Have separate pots for short, medium and long-term needs
For short-term goals, a deposit account is generally a sensible option. For the medium-term, a short-term savings account often works best. And when it comes to the long-term, I would typically suggest some sort of investment plan (depending on tax, earnings, time to retirement etc.).

4. Downsizing
Downsizing isn't always an option, and it also isn’t a decision that should be rushed into. If cash is short and you are sitting in a valuable property that is too big for your needs, then selling it may end up being a wise decision. There is no sense in staying in a house that is a drain on your resources.

5. Speak to a professional
Research suggests that people who work with a financial adviser are twice as prepared for retirement. Speaking to a professional is well worth your time. Find someone who specialises in dealing with people that have similar circumstances as you, and arrange a chat in person or by phone to explore how they might help and what that help is likely to cost.

If you would like to learn more about how an IFA can help you prepare for retirement, you can find a top-rated financial adviser in your area by searching the VouchedFor database.

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