RETIREMENT is when an individual stops employment completely. By law, the retirement age is gradually increasing from sixty (60) or sixty five (65) to seventy (70) in England. This will eventually filter down to the Caribbean region. It is the recognition that the lifespan of individuals universally, is increasing. There are more centurions than even before.
In order to facilitate this growing senior population, possibly due to medical advances and individuals managing their health and well-being more effectively; people generally retire later in life. On the other hand, some people desire to retire by forty (40) or fifty (50) years old and work steadily towards that goal. This is possible depending on the career path, income capacity and sound financial planning. Here are our top seven tips for retiring with ease.
1. Live well below your means: Forget about buying the most expensive car on the lot. It is a common trapping for young women and men in particular, once they have the earning capacity to make the monthly payments on a car loan to get most recent model luxury car, they get it. Remember that cars depreciate in value. Owning the most expensive car may give you a fleeting thrill but in the long term that money could have been invested, saved and otherwise better utilised. Be smart about your spending choices and purchase a good, reliable car that can get you from A to B and avoid unnecessary spending.
2. Start saving for retirement NOW: Most financial advisors would recommend that you start saving from your first pay cheque. Whether you started working in your twenties or thirties, (post- university etc.) start that retirement account immediately. For example, if you save one hundred dollars ($100) a month for retirement and it will soon add up. As your income increases, so too can your savings for retirement.
3. Be smart about your travel plans: After working really hard, you deserve a vacation. Are you planning on going on vacation every year? Every two years? More than once a year? Do you have friends and family overseas that visit you often and stay with you when they visit? You can be their guests and save a bundle in accommodation and transportation costs when you visit them. If you want to visit a country where you have no connections then choose your hotel or guest house wisely. Budget when you are on vacation. We have a tendency to over-spend when we are on vacation in another country. Avoid this temptation and only spend within your means.
4. Pay off all of your debt as soon as possible: Do you have a car loan? Mortgage?Credit card debt? If you can manage to pay your debts sooner due to an increase in your earning capacity, visit your financial institution and discuss re-structuring your loan payments so that by the time you do retire, you will be debt-free.
5. Invest more: Start investing early. Look out for possibilities to invest your money so you can reap the rewards in your retirement. For example, are there any public companies issuing shares? Each year you may be able to get a dividend for your shares in a company once it is doing well.
6. Passive income earners: Do you have a property that you can rent out? This is a great way to make money while you sleep. Think of other ideas on how you can make an additional income with little to no investment of your time and money.
7. Re-define your retirement plans: If your retirement dream looks like annual Mediterranean cruises and weekends in Okinawa, Mauritius or Sardinia, you may want to reconsider your ideas. You can still enjoy your retirement if it is scaled down to weekends reading, on the beach, inviting family and friends to visit you and vacations limited to short trips to see your loved ones overseas.
For most lawyers, the concept of retiring is a fantasy. But for the rest of the world, it is more than a pipe dream, it is a reality they eventually face and/or look forward to at the end of their working lives. Most people intend to retire someday and must plan for it.
Ms. Trudy O. Glasgow is a practising attorney at the law firm Trudy O. Glasgow & Associates, a court-appointed mediator and author in Saint Lucia (and has also taught law at University level in the UK)*
This column is for general use only, for advice specifically for your case, please see your lawyer.
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