Carrington Asset Management Ltd - Retirement Planning

Retirement Planning

When to Start Planning?

In an ideal world, retirement planning should be initiated the day you start your first job. But whatever stage in life you are at, it’s never too late to begin.

The importance of retirement planning

In your younger days, retirement may seem a distant concern – too far in the future to worry about. Yet, financial planning is a must if you want to enjoy a relaxed and contented retirement. Whether your ideal retirement is enjoying a simple time at home with your family and loved ones or full of new hobbies, adventures, and travel, you will need money.

Carrington Asset Management Ltd retirement planning means preparing for a consistent money stream after your working life is over. It involves putting aside money and investing with that goal in mind, and the strategy employed will depend on your ultimate goals, income, and age.

Growing old can be expensive, and inflation will only make it more so. Not having enough money to sustain future expenses can cause stress and worry, so having a retirement plan ensures financial stability in your later life without depending on others.

Reasons for retirement planning
  1. Lack of government benefits: Many countries are yet to implement robust retirement benefits for their retirees, which is one reason why starting a diversified retirement fund is crucial.
  2. Financial independence: Being responsible for yourself rather than dependent on family members or children to support you gives you the independence to live life on your terms and not be answerable or a financial burden to anyone else.
  3. Increasing costs: Inflation is a critical element to consider when planning your retirement. If you cannot keep up with the increasing cost of living, you may have to downgrade your standard of living.
Medical costs

Medical and healthcare costs are central to understanding the critical nature of retirement planning. While everyday living expenses continue to rise steadily, healthcare costs are soaring at a worrying rate. While other financial goals can be reduced, your health is one thing that cannot be compromised.

Planning your retirement?

The first step to planning your retirement is to imagine how you want to spend your days when retired and then estimate the amount needed to pay for it. Not forgetting to consider inflation.

Secondly, see how much of your assets can cover the costs, as this will help you calculate any shortfall amount you will need to plan and arrange for the future.

Thirdly, take a hard look at your present situation and decide how much you can put towards your retirement. The more, the better.

After this, you can consider investments. The sooner you start, the more time you have to take full advantage of compounding and take a few more risks. As you become older, you will probably want to take on less risk and diversify your investments to include instruments such as government-backed securities.

Summary

The future may be uncertain, but it certainly helps to be prepared. At Carrington Asset Management Ltd, we help guide you down the correct route towards the retirement you want while addressing some of the challenges you may face on the way. Having a flexible plan that can be adjusted as and when your life changes will prevent you from losing your way.