Somethings never change, they just become different – Joshua Caleb

Much has been said about the changes in preferences from one generation to another. One may, in fact, be led to erroneously believe that there is no need for certain things in life. The reality is different, sometimes the more things change the more they remain the same. And such is retirement. A time comes when we need to slow down because of reduced energy, regardless of our generation. The question we must address is, do we have enough to live by today and, are we actively putting aside a little more to sustain us when our active working years are gone? These facts don’t change just because generations have adjusted their preferences. Granted, today, people want to retire earlier that the usual 50+ that we have grown up seeing. But this, makes retirement saving even more urgent and important because the time out of employment is longer.

Now that we have that behind us, what we can agree will be different is the amount of money one needs in order to thrive in retirement. The key thing is to determine what you need to save in order to maintain a standard of life in retirement that is similar to what you have now. This is referred to as the income replacement ratio. Rule of thumb is that we need approximately 70-80% of our pre-retirement income to meet our retirement expenses. The 20 to 30% left to make 100% is assumed to be what you sue today that you may not spend in retirement, such as daily bus fare or fuel. It is easy to estimate this and then work backwards to what you need to set aside today, considering other factors like inflation. This is what you should put in Personal Pension Plan like ours. If you are lucky to have an employer who funds part of your retirement (what is called an occupational scheme), you could calculate this and save up the difference in form of additional voluntary contribution. If one starts early, perhaps soon after getting an income flow, they will enjoy better returns due to the power of compound interest.

To start your retirement planning journey with Geminia Life Insurance today please click HERE to request a call back.