Young people rarely think about their retirement and a pension and retirement seem like something that is very far away from them. Everybody realizes they will need a pension later on but would rather not think about it now. However, the future is created from the actions of today and that’s why we’re presenting some tips gathered from several Dutch pension experts about how to build a good pension starting from… now.
Starting on time
Experts advise not to make the common mistake of thinking that retirement is just something for the elderly. Even though old age is not the most exciting subject, by dreaming ahead, planning then becomes a lot more interesting. Someone might like to live in a bigger house, someone else might like to travel far and wide and many would like to stop working sooner. Hopefully, everyone will soon be able to realize all these ideas if they start to plan their retirement smartly now.
Cutting the expenses
Making a list of expenses each month can help to track the unnecessary things that have been purchased. Many current expenses will disappear later in life such as mortgage payments or commuting costs although other costs will continue to rise, such as healthcare. And everyone wants to keep doing the fun things, such as eating out or buying parts for their classic car. Others might miss something else. So, for example, paying the mortgage off earlier will offer extra disposal income to supplement a pension.
I
nvesting
Due to the extreme drop in interest rates, saving has become increasingly unattractive in recent years. Investing can be a more lucrative alternative, whether you are a freelancer, employee, or entrepreneur. It is no longer complicated, there are apps that make investing as accessible as possible. More and more employers are also offering an investment pension in which it is possible to determine the level of risk involved in how the money is invested. Experts advise people to only invest amounts they can afford to lose and to seek good advice beforehand because there are always risks involved.
Focusing on physical health
Given the high costs of health care, focusing on physical fitness today is key to staying physically fit in retirement. Health care costs are often overlooked by retirees, despite the fact that this issue is constantly in the news as costs continue to spin out of control.
Stopping on time
For some, retirement still seems too far away. Why work all your life and only be able to enjoy free time when ill health might not allow this? More and more people are asking this question. Those who are financially independent at an early stage can stop working much sooner. Saving alone will not enable that early retirement though so returns from investments should be considered. Is early retirement not feasible? Then people could also think about a part-time pension whereby they continue to work for a few days a week. In this way, they continue to build up a sufficient pension to enjoy a relaxed life later on.
