How to save for your retirement
When you’ve just started a business, and it’s beginning to bring in an income, thinking about your retirement and how to afford it might not be a priority. The younger you are, the less important it will seem. However, it’s important to bear in mind that, even if you intend for your business to be your retirement income (either because you plan to sell it, or you are going to take an income or dividends even when you step away from it), it’s wise to have other options too. Ideally, your business will go from strength to strength, but if it doesn’t, you may find your retirement plans have to change – unless, of course, you have other options to fall back on. Here are some of them to consider.
Savings
Having savings is a simple way to ensure your retirement plans don’t have to change course even if your business isn’t offering you the income you thought it would in retirement. Saving is a straightforward thing to do; just put a small amount of your income into a savings account each month, and by the time you come to retire, that money will have grown substantially. If you do this for many years, you won’t even miss the money that you put away, because essentially, you will never have had it.
With savings, there are two important things to look out for. The first is that you will want to use an account that requires extra steps to take money out of. If it’s as simple as a couple of mouse clicks, then it might be tempting to remove the money early. Secondly, you should look for a means of saving your money that offers a good interest rate. Some savings accounts are not so good in this regard, so shop around.
Investment opportunities
If you are putting money into savings, you might choose to take some of that income and invest it instead. Although there is certainly a risk in doing this since making a profit is not guaranteed in any kind of investment, the returns are much higher than traditional savings accounts if it does work out. The best thing you can do is to learn as much as possible about trading and investments before you begin. This is not something you can guess about, and having a broker or mentor on hand will help immensely.
Some types of investments to consider include:
- Stocks and shares
- Foreign currency
- Cryptocurrency
- Business startups
- Buying annuities online
Build your assets
You could also ensure you have money for retirement by buying assets as early as you can. In most cases, this would be property or perhaps another business, although you could consider fine wine, rare coins, or anything else that people will want to collect. The idea is that these assets will increase in value over time, and when you want to retire, you can sell them. This is why it’s a good idea to start as early as you can, as you will make more money this way.