It's time to start thinking about 'future you' and planning for retirement, writes financial expert Lorraine Donegan
If I had asked you to imagine your retirement six months ago, what images would you have imagined? Leisurely walks on the beach? Travel to far flung destinations? Concerts, restaurants, and time to do all the things you’ve ever dreamt of?
Well, after months of Covid-19 restrictions, if I asked you to imagine your retirement today, would your thoughts be any different?
Could your retirement closely resemble your Covid-19 life? Sitting at home watching TV, following other people’s lives on social, stretching the legs with a daily “round the block”? Essentially, getting by with the money you have, with no certainty about the future?
Will that be you?
Amidst all the real life and death heartbreak of this crisis, I’m getting a lot of calls to talk about retirement planning. Why? Because if this is what it’s like for a few months, the thought of the same type of living for years on end is downright scary!
During this time we have been forced to live a basic, no frills lifestyle. Luckily, for most of us, it's temporary and, more importantly, necessary for the greater good.
But if you retire and are restricted to an income that only covers basic living, the current reality could be your everyday life, without the communal ‘in it together’ spirit we are seeing around us.
So what can you do?
Well, now that you have youth and time on your hands, take a little time to list all the things you are NOT spending money on right now – that daily coffee in Costa (or wherever), hairdressers, taxis, restaurants, make-up, the cinema, the gym, the pub, etc.
Ask yourself, how much of all that “stuff” do you actually need? Of course we need to get to the hairdresser or beautician more than once every eight weeks for our own sanity, that is true, but I guarantee you, you’ll identify a lot of things that you don’t actually need.
Alongside a better feeling of community and ties to the people we love, one of the positives to come out of this lockdown period is that we can reflect on what’s really important to us. And, part of that reflection is a realisation that we can get by with a whole lot less material stuff than we may have previously thought.
Take that realisation and do something with it! Use the current pandemic as a wake-up call to your retirement and make yourself a promise to start looking after your “future you”.
Some “future you” tips to take away from lockdown:
Look at your bank statements and list what you spent your money on in March and April 2020.
Compare that spend to your outgoings in January and February 2020, and take a note of the difference.
Whatever that number is, halve it (you have to live after all!).
With the other half, save it. Doesn’t matter where – just start.
Speak with a financial advisor and find out the difference this new savings will make over the course of a year, 5 years, 10 years or more.
Learn if there are other, more effective ways to save this money.
Enjoy your new retirement future.
Lorraine Donegan, AKA the ‘Money Muse’ is a CEO and founder at Donegan Financial Services. If you’d like to ask any specific questions about any finance related topic, email [email protected]
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