If you are one of the millions of Britons over 50 who assumes, it’s too late to start sorting out your retirement plan; you’d be incorrect. It’s never too late to start squirreling away a few pounds for the future, and with one in four UK adults without a pension, there’s no time like the present.
- Financial Management
You can’t build a proper retirement without starting on a steady foundation. If you are still paying high-interest credit cards or have an automobile loan in the tens, now is the time to pay those off. Shelling out pounds in high interest while money is sitting in the bank collecting fractions of that in an interest paying saving account is not a good use of your resources. Make a list of the debts with the highest interest rates and pay those off in rank order – freeing up cash reserves that will come into play later.
- Liquidity Investments
One of the downsides to pensions is the penalty incurred for early withdrawals and other rules of governance making it the least liquid asset. By opening an ISA, you can invest as much as £15,000 per year without having to pay additional taxes upon withdrawal. Because ISAs grow tax-free, you are free to take your money out at any time without penalty making it a great dual-purpose investment as it serves as both a rainy day fund and savings mechanism.
- The Four-Walled Piggy Bank
Likely you’ve owned your home for a few years now and are currently banking that former mortgage payment. Well, you are also likely sitting on thousands in equity in addition to those mortgage savings. Depending on your particular situation, your home’s equity can be drawn upon later in retirement similar to a pension to cover expenses later in life.
- Later Life Landlord
Buy-to-Let schemes are making a comeback due to favorable rates in the form of interest only loans. By carefully choosing property in a popular area, you can count on a continuous flock of renters with profits that will pay your associated property cost and dividends to fund your retirement accounts.
- Expendable Income Years
For many Britons, getting older means higher earnings, relatively small debt loads, and mortgage free living. During these prime years, it is important to take advantage of your expendable income by finding a financial advisor that offers a range of moderately conservative investments that offer high yields to make up for your slow start.
There is no cause for alarm just yet; you can still get on the right track by using your remaining pre-retirement years to diversify your investments in the proper schemes. You can start building an adequate savings plan today.