Saving for retirement


Life is much easier when you are young but getting older is a process that is inevitable for all of us. It is not easy to go to retirement, and it is even harder to get used to everything that comes with it. If we put aside the physical or natural, we will still have to face with another, maybe even tougher changes in our life. Among them, probably the crucial difficulty will include the much lower life standard we will have to get used to since the pension does not provide some enormous income. But there is a way that could help you overpass this complicated period when you retire, and that is QROPS. Although it may seem like a strict procedure in fact with a few proper advice, this challenge can be reached in no time. 

Recognize That You Are Not Rich

In fact, this is the critical moment of the entire process because once you become aware that you have to save money everything goes easier. That is why you should try to increase your income while you are young, and the best method to do so is to work harder even if it considers getting a part time job too. Also, try to spend less and instead save more money for the retirement. You will soon see that this just seems simple but, in fact, you will find it more than difficult to give up of all unnecessary expenses.

Find Less Expensive Place To Live

Expats will not have any troubles finding a place on Earth where costs of life are much lower than in their country. In last five decades, this has become a real trend among the pensioners, and it is quite useful. Try to imagine yourself residing in a country with a pleasant climate that suits your age and even nicer prices. And if you don't manage to save enough money to fulfill this dream don't get discouraged you can postpone your retirement for some time. This way you will have more time to build a bigger retirement portfolio.

Manage Percentage of Stocks and Bonds

It is clear that preparing for retirement has to have an asset allocation, especially if you are an expat who now lives in a whole new country and plans to stay there for the rest of his life. The essential thing to do when managing your savings is to set aside a reasonable amount of money just for emergency cases. But apart from that amount, you also need to have the one that concerns investing. Indeed, the first step when deciding to save some money for retirement is deciding to invest your existing funds. The crucial thing to consider is the ratio between stocks and bonds.

Of course, everyone knows that stocks are more unpredicted while bonds are a safer way to increase your savings. However, bonds are also the slower way of the money increase. So, the advice we step forward with considers finding the best possible ratio between stocks and bonds investment. If you are young, it means you have much time to take risks and to invest more in stocks. For instance, you might take 80% of your existing funds to stocks and 20% in bonds. On the contrary, if you are old and hence much more afraid of the risks, you may significantly lower stock investments and thus have 30% stocks and 70% bonds. However, most of the people, including expats, decide almost to equalize the ratio between the two so that they have 60% stocks and 40% bonds.

Decrease Your Fees

Those experienced will know that fees are the greatest deception because we think they are low. But if you look at the things more thoroughly and take a calculator, you will end up plucking your hair once you realize how much money was gone just because of the fees. For instance, when you see that the fee is 2-3% you will think everything will be alright. But at that particular moment, you don’t realize that it is 2-3% on an annual basis. So, practically you will have to pay it every year, and more money you save means more money being taken away, for the fees. If you save money for 40 years, then it is a real fortune that you have lost. Therefore, a reasonable advice is to lower your fees. Try to find the smallest one and control it every once in a while. It will surely leave more money on your bank account.

Therefore, if you haven't thought of your retirement plan, we suggest you doing so as soon as possible. You may not be conscious of the fact that time flies fast, and you will not turn around before ending up old and poor. Look around, talk to your friends or consultants and find the best possible retirement plan. Good luck!

Retirement Plans

Life is never easy, but as you get older it becomes more and more difficult because there are many things you have to finish and prepare so you could have a safe future. When you are young, there are almost no boundaries. You can go anywhere you want and do anything you feel you should – only sky is the limit. But at some level you will start thinking about one of the most difficult periods in one’s life – retirement. This is not an easy step to make because going to retirement will change your life from its very roots. Not only will you have less liability but also significantly lower income, which can be a heavy blow to the lifestyle you used to have. How will your life change after the retirement depends on many factors?

Most of the people are preparing their whole life for that moment. There are two major ways how people usually prepare for the retirement and they consider either saving money in a bank or choosing a retirement plan. It is not a surprise that people often have dilemmas which way to choose because both of these ways have their pros and cons. However, most of the people today think that having a retirement plan is much better than having money in a bank and there are obvious reasons for such an opinion. So, if you have any doubts about whether you should have a retirement plan for your nice and easy future, feel free to read the rest of the article which brings you benefits and facts about retirement plan.

Why a Retirement Plan

You have to be aware of one thing – Retirement is expensive! And while you are still young, you have to make a plan that will pay off all your future costs, wishes, travels and whatnot. Thus, you need to have a goal for your future, the goal that is related to start achieving your retirement plan little by little. You can start saving small amounts of money and then to start increasing them because starting to achieve your retirement plan is never too early.

Benefits of a Retirement Plan

When you stop working, you will need a lot of you preretirement income to lead a life and to have the same standard just like you had when you were working. And choosing a retirement plan instead of saving in a bank is much better because a retirement plan has many benefits. For instance, your retirement plan will have important tax advantages. So, you have an employer whose contributions are deductible from his income. But your contributions are not being taxed until they are distributed to the employee. But what is most important for your retirement plan is the fact that your invested money in a retirement plan will grow tax-free. Apart from tax advantages, retirement plan has other significant incentives, such as various tax credits. These tax credits are usually in accordance to your present contributions and depending on your retirement program and your contributions, you are able to save decent amount of money that will surely help in building your savings.

Saving in a Bank

Saving money in the bank is a very unsafe option for many reasons. For example it will be very hard for you to give up an appropriate sum of money, because you will always find a good excuse for spending it somewhere else. Also, banks are not as safe option as they used to be especially after the big economy crisis in 2008 when the banking sector was most affected and many banks were bankrupt. On the other side this type of retirement also has some benefits, especially if your pay is not very high.

By most estimates, you will need between 60% and 100% of your final working years' income to maintain your lifestyle after retiring, because you may have higher expenses in some things such as medical care, but lower expenses in others. So in the end, perhaps you won’t even need those expensive retirement plans, but to be sure you should find a good financial advisor that can help you develop an estimate of your needs and a plan to help you accumulate a retirement fund to provide income you'll need. But you should also have in mind that the rising cost of living means you will need to plan on an annual retirement income that could be substantially higher than what you spend now.

So in the end we might give a conclusion that saving money in the bank is not a bad option, but it is a very risky move to make. Having a retirement plan is a much safer solution because there are just too many different and unpredictable factors that can affect banking system and your money in it.