We’ve talked about this before but we cannot stress this enough. Please put things in place before you retire. We notice that many people do not have annuities, savings or any other sources of income after they finish working. It is so important to have an emergency fund or some form of savings available until your company pension or NIS pension kicks in. Inevitably you end up waiting for the systems to kick in (which is an issue by itself but we digress) and you can be without income for a while, and that’s never fun.
It is never too late to start saving. Some savings are always better than no savings. Here are some tips for getting your savings started based on your age:
- Early 20s/just started working – you can start an annuity or some sort of retirement plan. In addition, you should try to get an emergency fund going. My dad would always say have a “small savings and a big savings”. So the emergency fund would be the small savings and the annuity, the big savings.
- 30s – You can start an annuity but note that you will have to pay a little more for a reasonable pension since you have less time left until you retire. Endowment policies are also good investments – at maturity you get a lump sum. For example, you can take out a $250,000 endowment which matures when you turn 50, and you will get that lumpsum on your 50th birthday.
- 40s – In addition to the above suggestions, I think an income protector plan is always a good investment. You want to be as prepared as possible for any setbacks.
- 50s – Home stretch. People like to think that they don’t have time left to save, but that’s not true. An endowment would probably be your best bet at this age. You can also do back to back endowments which pay you at age 60, upon retirement, and ages 65 and 70.
Hoping that you apply these tips for yourself. You can never have too much money saved. Always remember, #Perituscanhelp!
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