27 May Kick-Start Your Golden Years At 50
Retiring in your early 50’s can seem like a pipe dream for many. However, with the FIRE movement (Financial Independence, Retire Early) gaining ground, more people are exploring retirement strategies that would enable them to have financial freedom from an earlier age.
This comes at a time when life expectancy is increasing. Those born in 2016 will on average live seven years longer than those born 25 years ago. For those looking to retire early, careful planning will be required, working alongside your Portfolio Manager to tailor your savings strategy to your specific retirement goals.
Envision your retirement lifestyle
Before developing a retirement strategy, take time to consider what “retirement” looks like for you. What kind of post-work life do you want to have? Do you want to maintain your current lifestyle, or are you planning to downsize in this new stage of life? Will you work part-time or immediately begin withdrawing income from your TFSAs, RRSPs and investments? This will determine how much you should be saving and what kind of investment plan is best for you.
Invest your nest egg early
With compounded interest, the earlier you start investing, the more time your nest egg will have to grow. Saving in your 20s and 30s can be challenging, as this time in life often coincides with other expenses, such as mortgages and childcare, however, it’s good to start saving for retirement as soon as you’re able to do so.
While everyone’s retirement plan is tailored to their personal situation, we can universally agree that when it comes to retirement savings, earlier is better than later and more is better than less.
Make consistent returns the goal
Financial returns are a key consideration when developing an investment strategy. However, as you approach retirement, we recommend that you focus on consistent returns over the highest returns, as by nature, the highest returns often come with greater risks. If you feel you aren’t going to achieve your retirement goal, you may be tempted to take more risks as you get close to the finish line – but risk and reward are a balancing act, and we recommend prioritizing consistency as retirement nears.
Interested in strategies for effectively managing your retirement investments?
Sign up to receive tips from the Genus Capital team.