How to Save for Retirement without Six-figure Income

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save money for retirement

You all know that you will retire from work someday. Even though you wish to continue to work voluntarily, you may back down because of your golden age. As it is not feasible for everyone to continue work in the golden period of life, you should have enough retirement funds set aside so that you can live your life comfortably.

Many of you think that you should have the six-figure income to stash away for retirement, and sometimes you think you should put off building retirement funds because you are too young to do so.

Well, if you want to save enough money for your retirement, you should start it as soon as possible. You do not take into account the rising inflation, and therefore if you start saving money as you reach your 40s or 50, you will have hardly saved enough money.

If you do not want to bear financial stress during your golden period, you should start building retirement funds right away.

No matter you are retiring early or not, you do not necessarily need to have a six-figure income. Most of the household have five-figure income annually, and that is sufficient to put aside enough money for your retirement. However, it will be best if you are strategic and sensible with the use of your money.

Here is how you can save for your retirement.

Set goals for your retirement:

When it comes to putting aside for your retirement, you cannot start it unless you have a solid ground to do it. The first question that comes to mind when you start saving money is how much you will need for your retirement. This is why you need to set goals for your retirement. Based on your current needs, you can estimate how much you will need during your golden age. The following are the factors you will have to take into account before taking the plunge.

  • How much money you need for travelling
  • Whether you will have a mortgage or not
  • How much will you need for healthcare expenses?
  • What will be the cost of living?

Once you have answered these questions, look at your current budget to adjust expenses. Of course, this is based on anticipation, but it will be enough to get into the swing.

Live frugally:

If you are currently living at £60,000, you will need less than it, for instance, £40,000 or £50,000. You can quickly reach your retirement saving goal if you control your spending. Look over your budget to find out how much money you spend every month. Of course, you cannot cut back on essentials, but you can whittle down on discretionary expenses.

  • You do not need to dine out every day or every weekend. Try to prepare your meal at home. However, you can eat out once in a while.
  • Use public transport instead of your vehicle if possible. Try to commute on foot if it is a short distance.
  • Rent a room of your house to allow more cash inflows.

These small tweaks in your budget can help you save a lot of money. The more sensibly you spend money, the sooner you will reach your goal.

Settle your debt as quickly as possible:

One of the significant hurdles that keep you from reaching your retirement goals is outstanding debts. If you have any debt, try to settle it on time. If you make defaults, the cost of the loan will add up. It means most of your money will go toward debt repayment.

Financial experts suggest living frugally because it can prevent you from borrowing money. Further, you should be careful with the use of your credit cards. You often do not realize how much you have spent through your credit card unless the bill is generated. Make sure that you do not use your credit card too often. Use cash as much as possible.

If you have multiple debts like guaranteed loans, payday loans and credit card bills, try to pay off high-interest debts first. If it is still challenging to keep up with repayments, talk to your lender. They will help you by offering a solution that suits your current financial situation. Some reputed direct lenders like London Cash Lender offer convenient plans.

Increase your income:

Of course, it is not easy to set aside retirement funds along with multiple debts. Therefore, you should focus on improving your income sources. If you have a salaried employee, you should switch to another job with higher income. Learn soft skills to get a job with higher pay, or you should start your own business. Several business ideas are out there you can pursue without shelling out money. Online businesses are the best way to earn money with meager investment.

Saving for retirement without six-figure income can be possible provided you are not reckless with your spending. You will have to take care of every dime you earn. Change your lifestyle, find additional income sources, and pay off your debts on time.

Read More:

  1. Seven Tips for Buying Health Insurance In India
  2. What are The Tax Benefits on Joint Home Loans?

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