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The Top Three Steps to Take for a Secure Retirement

Retirement is not the most thrilling subject to devote your time to, but it is an extremely important one to consider and to consider at the earliest possible point in your career. With money not quite stretching as far as it used to, it is even more imperative that you take the steps necessary to ensure yourself a secure retirement – but what are the steps to achieving such a thing?

#1 – Set Clear Goals

The first and most essential is an unavoidably basic one: set yourself some clear goals for retirement. Your savings plan will not be a coherent one if you do not have distinct milestones for which to aim. For example, if you are hoping to travel widely, you’ll need more in the way of liquid cash than invested holdings. For an improved quality of life, you’ll need to think more shrewdly about your present-day budget and what you can put away.

#2 – Contribute to Workplace Pensions

Another seemingly obvious step is to actively participate in your workplace pension scheme. The operative term here is ‘active’, as any worker earning over £520 each month is eligible for automatic enrolment into such a scheme by their employer – and would have to physically opt out in order not to participate.

As it is, if you are employed you likely have a workplace retirement pension scheme in place, into which your employer is already making contributions. The key is to invest more than the monthly minimum into the scheme from your own salary. The more you allocate to your pension from your payslip, the more your employer contributes and the more your pension pot grows over time. This also allows you to benefit from the unique tax relief afforded by pension schemes, where the proportion of your pension-allocated pay that would be taken as tax is instead deposited into your pension.

#3 – Save Wisely, and Invest Widely

But your pension scheme alone shouldn’t be trusted to support your later life plans. It will be a crucial, even fundamental part of your financial structure in retirement, but diversifying your finances early enables you to grow your money in different ways – and potentially greatly improve your financial situation in the future.

For instance, saving money through ISAs enables you to securely gain from rising interest rates, and thus use later on larger-scale payments such as holidays, home renovations or other activities. Meanwhile, putting money away in a global index fund enables you to enjoy low-risk growth via stock markets, and potentially generate passive income.

No two retirement journeys are the same, and advice regarding retirement savings can only get so specific as a result. However, the above three tips should be more than enough food for thought, to get you thinking more critically about your effects to prepare for later life.