Real­i­ties about re­tire­ment

Daily Trust - - BUSINESS -

1. Plan to beat in­fla­tion in fu­ture:

The in­fla­tion rate is ris­ing and so are re­tire­ment costs. There is a chance you will need more money than you think in re­tire­ment. So save as much as you can dur­ing your earn­ing years. Aim to save at least 15 per­cent of your gross pay. Not there yet? In­crease your re­tire­ment sav­ings con­tri­bu­tion with ev­ery pay raise, be­fore you get too used to that higher pay­check.

2. Go be­yond the work­place:

You can go be­yond the pen­sion ar­range­ment al­ready in place in your of­fice. Con­sider making ad­di­tional con­tri­bu­tions into your re­tire­ment sav­ings ac­count or put your sav­ings in in­vest­ments you can rely on at re­tire­ment.

Do not let mar­ket swings shrink the value of your sav­ings. Deter­min­ing how to best al­lo­cate your sav­ings be­tween var­i­ous kinds of as­sets in­clud­ing stocks, bonds and cash - can be a pow­er­ful way to keep your re­tire­ment sav­ings grow­ing. Spread­ing your sav­ings across var­i­ous sec­tors and as­set types can help soften the ef­fects of big mar­ket fluc­tu­a­tions. Steer clear of emo­tional in­vest­ing: As in­vestors, our emo­tions tend to follow mar­ket cy­cles. When mar­kets per­form well, we tend to be­come eu­phoric and pour money into stocks. When mar­kets turn down, our emo­tions change and can cause us to pull out of the stock mar­ket just as it reaches its low and miss out on po­ten­tial gains as it rises again. The les­son: emo­tions can cause us to do just the op­po­site of what we should do.

3. Save strate­gi­cally: 4. Leave your wor­ries be­hind:

Even if you build a smart sav­ing and in­vest­ing strat­egy, un­ex­pected events can oc­cur. You could ex­pe­ri­ence an ill­ness that pre­vents you from work­ing and earn­ing an in­come. You need to pro­tect your­self against the risks in to­day’s world. Your ad­vi­sor can help eval­u­ate your per­sonal sit­u­a­tion and line up the right lev­els of pro­tec­tion. With suf­fi­cient pro­tec­tion, you can fo­cus on the fun parts of plan­ning for the fu­ture.

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