Established career and business? Check! Home Owner? Check! Upto date loan repayments? Check! School fees paid? Check! But wait! Have you secured your financial future?
While it can seem like paying off your mortgage and educating your children is all you have to do, there is still more. What’s your plan for retirement or it is still a long way off? It may be 10 years away or more, but look how fast you got to this age. If I could get a shilling for every time I heard “Life happened in the blink of an eye!” when people speaking of ageing, I would be rich. Now is the time. It’s never too early to set you and your family up with financial security and prepare yourself for retirement.
Make plans for a retirement fund
Still in your prime years and you feel the world is your oyster? Career is going great and everything is taking shape. The last thing on your mind of course is retirement. Retirement may seem a lifetime away when you’re in your 20s and early 30s. But remember this. Retiring comfortably requires that you establish a retirement fund as soon as possible. Any small amount saved for retirement now can make a significant difference in the future. Start saving as soon as possible and as much as you can if you want to provide enough to fund your retirement years. Your retirement fund will provide you a steady source of income in your later life when you no longer have money coming in. Think of your retirement fund as payments to yourself in advance. Your future self will thank you.
Diversify your investments
Thinking of investing your hard-earned money in stocks, real estate or commodities? Great idea! Luckily, you don’t need a lot of money to get started. Start small and see how far you get with regular investing. As you invest remember not to put all your eggs in one basket. What do I mean? Take the example of a restaurant owner. He would maximize sales by having both ice cream and hot chocolate in his menu. Why? Both of these items sell remarkably well depending on the weather. When its hot ice cream would be the best sell while when cold, the hot chocolate will be a hot ticket item. The restaurant owner loses nothing when weather changes. This applies to you as well. You need to make sure you have money coming in no matter the weather. A financial advisor can assist you in determining the asset mix that is most likely to secure your financial future.
Insure your family’s future
Ever wondered what would happen if you were no longer able to provide for your family? Spend some time and identify any risks that you can protect your family against. One that comes to mind is health and life risks. Especially now that medical bills have been weighing many family with huge burdens. Purchase a medical cover while in the prime and at your best in terms of health. Remember as you age, premiums become more expensive and health conditions start developing that insurers will shy away from covering. Don’t forget that your insurance protection requirements will change over time. You may need to consult with a financial advisor often or whenever a major life event occurs, such as the birth of a child or marriage.
Make Retirement Savings Hard to Access
Saving funds for retirement requires discipline and that does not come easily to most of us. Why? The savings you will be having needs several years if not decades to mature and multiply in a savings account. The problem with many retirement savings funds is that people tend to withdraw money when they need cash. The result is you may have nothing to retire with when the time comes. How do we resolve this you ask? Easy! Make your retirement savings hard to access. Open a savings account with a tough policy for withdrawal. Some banks offer fixed deposit accounts where clients must request to withdraw that takes several days. This will help you think twice before withdrawing from your retirement savings fund.
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Irene Koskei
MSA Finance Consultant and Trainer
