Saving For Retirement Starts Yesterday

Saving for retirement starts yesterday

Here’s a wake-up call if you ever needed one. According to the 2018 Savings Index from National Bonds Corporation, more than eight in ten UAE residents felt they were not saving enough for their future. Eighty-five per cent of those polled said they were not putting away enough cash. If you’re a parent, you could say that your children’s priorities take up all your time and savings. But by the time you realise the importance of a retirement plan, it might be too late.

Be life ready

Parents have a lot of responsibilities, but they also have a lot of expenses. Be life ready by accounting for all the big spends that will come your way and make a financial plan to deal with them accordingly. Here are a few examples of what to account for:

• First car
• School fees
• Investment plans
• Insurance plans
• Second car
• University fees
• Holiday expenses
• Marriage expenses
• Family home
• Medical emergencies
• Retirement plan   

Be the early bird

Get an early start and invest for your retirement. The younger you are, the easier it will be to save. You can avoid adopting expensive habits and get into an ‘accumulation phase’ (i.e. building your wealth for retirement). As life expectancies increase, one of the problems retirees may face is making sure their money lasts as long as they do. Get the power of compounding on your side and make your money work harder with the right investments.

e.g. If you invest $1,000 a month for retirement in thirty years at 8% return, you would have about $1,417,613 at retirement. If you only had twenty years to retire, you would receive $572,660. This is why it’s important to start early.  

Plan for emergencies

As the world becomes more volatile, circumstances can change overnight and you can’t say you weren’t warned. Experts recommend that you keep an emergency fund in addition to your plan for retirement savings. You are advised to keep three to six months’ worth of living expenses stashed away in a savings account. This will give you peace of mind and confidence to face the future.

Save regularly, not occasionally

One trick that can make saving easier is by setting up automatic contributions. If you don’t have to physically transfer money into your savings account every month, you won’t realise you’re saving. Set instructions on your income account to automatically transfer funds into a dedicated savings account or the Smart Savings Plan. It never hurts to analyse your spending too, so review your expenses regularly to see where you can cut down.

Investment diversification

Once a significant amount of money is saved (not disturbing your emergency fund), you can use it to invest. There are several investment options available depending on your risk appetite and financial goals. It’s said that risk and returns go hand-in-hand and you shouldn’t put all your eggs in one basket. A Wealth Specialist can guide you on a range of investments, in line with your ambitions and risk ability

Make smart investments

Making the most of your retirement savings is crucial if you want to build a nest egg that will withstand the risks of inflation, market turmoil and your unexpected longevity. Plans such as Global Choice offer a savings solution that maximises your returns from a wide range of award-winning funds, with insurance protection. Premium payment terms are totally flexible, and you can make regular withdrawals, as well as change the premiums on your policy.

Now that it’s clear that your retirement plan is your responsibility, start taking concrete steps to make it the best one you can afford, after taking care of your loved ones. As always, Standard Chartered is here to help you achieve your objectives. For guidance on shaping your retirement plan, our Wealth Specialists are available at your convenience.

Disclaimer

This article is brought to you by Standard Chartered Bank UAE. All information provided is for informational purposes only.

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This article is for general information only and it does not constitute an offer, recommendation or solicitation to enter into any transaction. This article has not been prepared for any particular person or class of persons and it has been prepared without regard to the specific investment or insurance objectives, financial situation or particular needs of any person. You should seek advice from a licensed or an exempt financial adviser on the suitability of a product for you, taking into account these factors before making a commitment to purchase any product. In the event that you choose not to seek advice from a licensed or an exempt financial advisor, you should carefully consider whether the product is suitable for you. You are fully responsible for your investment decision, including whether the investment is suitable for you. The products/services involved are not principal-protected and you may lose all or part of your original investment amount.