Saving for your retirement can be difficult. Maybe it has been in the back of your mind for a while but life just kept getting in the way. Or perhaps you never saw the importance of retirement savings until now. If you’re hoping to retire in the next 5 to 10 years and haven’t made any savings, don’t worry. Although it will be more difficult than doing it gradually, it is still possible. A lot of people find themselves in this situation in their late 50s and early 60s. Many people feel as though their existing pensions just won’t go far enough. If you find yourself in this situation, there are lots of ways you can build your retirement pot fast in your last few years of work. Below are a few tips to help you on the path. Hopefully they can kick start your retirement planning journey.
1. Cut back on unnecessary expenses
This point may seem a little obvious, and you may feel you’re already saving as much as possible. But, if you are really serious about boosting those savings, there are almost always more ways to cut back. Often, the things we have had for a long time and think we need can actually be cut away for good. For example, cable TV, expensive cell phone packages, and name-brand food products are some of the biggest drains on the average person’s savings potential. Switching to store-branded food products for things like pasta, cereals, and potato chips can save you a remarkable amount on your weekly shop. And in regards to the cable TV, the regular channels really aren’t that bad. With online options such as Netflix and on-demand TV, you can really manage to cut away your cable bill without losing all of your entertainment choices.
2. Cut down on eating out
Eating out can be an expensive vice. When people frequently choose to eat out in restaurants or order takeaways instead of cooking meals at home, it can quickly drain their expendable cash reserves. Instead, try cooking in the house as much as possible. Cooking at home can be as much fun as eating out, and you can always use it as a fun hobby once you retire. By reducing the amount you eat out, you should see a considerable rise in your monthly savings. You can always try out the expensive restaurants when you retire and are able to really enjoy it.
3. Create an additional income source
You may think you are at the limit of your money-making potential when you work a full-time job. However, with the rise of online work opportunities, you can now take on side incomes and earn a little extra cash in your free time. English speakers can get paid around $13AUD or more per hour online to help people practise English. Also, depending on your skillset, you can pick up freelance gigs like writing, proofreading and transcribing videos, all from the comfort of your own home and at the hours you choose. You can also consider filling your weekends or evenings with a part-time job or try to take extra overtime at work if possible. The prospect may seem a little tiring, but if you’re really keen to reach your retirement goals, additional incomes are a great way to get you there.
4. Utilise your empty space
When most people hit their mid-50s and early-60s, their once lively and full family homes become empty nests. This can be a little sad for some and could be fantastic for others. However, you should be looking at each empty bedroom as a dollar sign. You can use sites like Airbnb to rent out your empty rooms at a great price. This type of accommodation is becoming more popular with all types of travellers due to the fair prices and exciting experiences to be had by staying at the home of a local. And don’t worry, you don’t have to be throwing dinner parties every night for your guests. Your level of interaction with guests is up to you. You can also select what type of guests you want to stay based on their profiles and reviews from other hosts, too. So your house doesn’t have to become a thoroughfare for gap-year kids, and you can enjoy the benefits of a considerable amount of extra savings.
Keep in mind that there may be some additional insurance, tax, or (in the case of town houses / complexes) body corp. rules that you have to consider here, so be sure to get some advice specific to your situation before filling in your Airbnb profile.
5. Consider downsizing your home
If you’re a homeowner, downsizing could be a fantastic way to boost your retirement savings. Often, as people approach retirement age, their homes are much bigger than what they actually need. Of course, it’s nice to have a spare bedroom or two for when family and friends visit, but large family homes are usually rendered redundant. It’s well worth getting your home valued to see how much it’s worth. You may even find it’s worth more than you paid for it. Consider browsing the market for smaller alternatives, or you can always consider renting a place until you retire and purchasing a new home at that point. The decision to move or downsize can be tough, but it’s likely to bring a large injection of cash into your retirement savings.
Finding the strategy that’s right for you
When you first begin thinking about your retirement, it’s a good idea to consider the type of lifestyle you imagine for your retirement and how many years you are going to plan for. This can be a tricky subject, especially if you’re beginning planning at a late stage in your life. Our retirement planners on the Sunshine Coast can help you work this out.
There is a wealth of great resources online that can help you to think of ideas for your retirement or help you with the more tricky elements of the planning, like investments and managing your Super. Once you have developed a clear idea of what you would like to do and see in your retirement, it becomes easier to work out how much you need to save.
You should also consider consulting a financial planner as early as possible to help you get started. The right advice can go a long way in the final push for saving for your retirement dreams. By investing some of your time in getting the right advice, such as with a 2-Hour Free financial planning consultation with the team at Ethica Private Wealth Specialists, you can save years of hard work by having your money work better for you – so your time can be spent enjoying your retirement instead.