If you think about planning for retirement, you wouldn’t think it applies to you if you’re still in your late 20s or early 30s. But the fact is the earlier you plan your retirement and start saving, the better it is for you to have a happy retirement. A lot of people in their 20s and early 30s believe they are not ready for retirement and they always leave it for later. If you only start retirement planning later on in your 40s, you may find it extremely hard to save up for your own retirement if you still have debts to repay.

If you have accumulated debts which haven’t been fully repaid yet by the time you reach retirement age, it makes it more difficult to transition to retirement. Most people think they will have finished paying their debts by the time they reach that age but only if they were disciplined in saving and spending, will they be able to be free from debt. And it’s not easy to repay debts while on pension since you no longer have any regular pay checks coming in.

Being financially unprepared before your retiring years, can force you to keep working longer to claim an Age Pension or any plan that’s offered at your time. Investing can be a great source of income if you do it wisely; if done well, it can give you the option to retire whenever you want.

Retirement Planning

The best method for retirement planning is to start as early as possible. Setting a plan to save a few dollars from every pay check you get and actually sticking to the plan can be highly beneficial in your financial plans. Even from the first pay check you ever receive, put aside a few dollars like $5 a week or $50 a month can be great for your retirement fund. You might not notice it if you only put aside a small amount each week or each month but after a few months or even a few years, you’ll notice you’ve already saved up a lot of money.

The transition to retirement will not be difficult if you create a retirement plan and stick to it. If you’re savvy with prospective investments, they can also help make your transition easier. Superannuation funds are there to help Australians have a comfortable retirement but if you haven’t reached the age to access your superannuation yet, your savings and investments can be very helpful.

In order to have an indication of how much you would need to retire happily, you will need to find out if the return you’re getting from your investments can cover your current living expenses. If you are a savvy investor, you may be able to retire before you even reach retirement age. An easy way to calculate how much money you need to retire is to work out how much you actually spend, double that number and add a zero at the end. This amount will indicate how much you need you would need to retire comfortably. However, this indication may only work if your investments have regular returns and if your superannuation covers it.

If there’s a significant gap between your figures, you might have to consider saving more over the years. If you still have debts, you should clear them quickly so your retirement planning can come into effect quicker.