You might be thinking that it is not the right time to start saving for the future. There are few more people who have similar thoughts and believe in spending every penny on their present. Believing that this is the best age to fulfill your dreams is not a bad idea but you should consider about your future as well.
Today people after retiring from their jobs are suffering financially. They couldn’t even own some of the basic necessities of life, reason being that they never planned to save and spent their money on useless pleasures, which had no further benefits. Would you like to be one of those people? Want to spend a better life after retirement? You should start saving now. Open a savings account in your bank and avail benefits like collecting interest on the amount.
However, people have learned from the society and have started saving. If you are already saving money for retirement, you still need to make sure you are stashing the right amount of cash. Here are some signs that you are not saving enough for life after retirement.
You Are Not Clear About Your Savings Rate
The most important sign that is actually a red flag to your savings is when you don’t have a clear about your savings rate. Saving rate is calculated by dividing saved amount with your annual income. You should calculate your saving rate and try to increase savings rate every year so that you have ample sum available till you reach your retirement age. According to experts, people save around 5.5 % of their income. However, financial experts recommend saving 10 to 15% of your income for life after retirement. You should try to save somewhat closer to the recommended percentage as you don’t know how expensive things would be in future.
Spending Too Much Of Your Income
As advised, saving 10 to 15% of your income will generate survivable sum for future but if you are having trouble saving more from your income, you should take a closer look at your spending. There might be things that are useless but still you are paying for them. The best option is to cut back these spending. Moreover, you’ll find that you are spending too much of your take home pay on little things that can add up, like having lunch at restaurants more than once a week. Make a list of your spending to make sure how you are consuming your income and what things are to be avoided.
Medical Expenses Can Cause Trouble
You can have medical expenses at any age and you know how difficult it gets to pay huge amounts of medical bills. While the discussion is about saving money for life after retirement, you shouldn’t avoid medical bills and delay them for tomorrow. You should pay your bills on time so that you can save money for tomorrow. Moreover, if you can’t pay your medical bills today, how will you be able to survive tomorrow? Start saving today so that you don’t have to worry about not being able to pay hospital bills in the future. It is a sign that you are not saving enough for life after retirement.
Having Credit Card Debts
It’s an era of plastic money and people have made it a habit of using credit card to purchase everything. Well, this is one of the signs that you are not saving enough for life after retirement. When you are currently living off your credit cards or trying to get out of credit card debt, there’s a good chance you are not focused on retirement. Examine your spending and make a budget plan to start living with your means. After making a budget plan for your spending, you should make a plan to pay off your debts before reaching retirement. If you are unable to pay your debts now, it will be a burden on you in future. If you are unsure about saving first or clearing your debts, you can consult a financial planner regarding this.
Not Sure About Money You’ll Need When Retiring
It is obvious that you must have an estimate about your lifestyle after retiring. However, many don’t have an idea that how much they’ll need to maintain their lifestyle in retirement. If that’s the case with you, then you are not saving enough. You should make an estimate of your lifestyle in future; include the basic expenses like house rent, bills, and travelling cost. Keep adding the other expenses to the list accordingly; this will help you get clear idea of how much money you’ll need after retiring to live a healthy life.
These are some signs that tell about your saving issues. According to these signs, if all of these measures are in your life at the moment, then it’s the time you should take harsh steps and resolve your problems.