We are living longer than we used to, thanks to improved standards of living and better healthcare. Many people are enjoying longer retirements than they planned for, but that can come with the prospect of not being able to make ends meet in later life.
So the sooner you start saving for retirement, the more you’ll be able to save, and the more comfortable you’ll be.
The age you plan to retire
Whether you own your own home
The rate of inflation
Whether you have debts that you need to manage
Your family and number of dependents
Whether you plan to continue working, in any capacity, and semi-retire
A good starting point is to assume you will need between half and two-thirds of your salary, after tax is deducted, to maintain your current lifestyle.
You may be entitled to social security, but in most cases it will be difficult to live on this alone. You should plan to supplement any social security with savings and investments of your own if you possibly can. Remember, too, that the laws guiding social security may have changed by the time you reach retirement age.
You may find that your employer has elected to contribute toward your retirement plan in proportion to your own contributions, up to a defined amount. It can help to grow your savings significantly, and you may also be entitled to tax relief on the combined amount saved.
When planning for your future, here are three key points to keep in mind:
Start as soon as you can
The earlier you start saving, the more the interest on your savings will compound, and the longer you will have to save.
Make the most of any tax-free savings and employer contributions you're entitled to.
Build your knowledge
You might want to seek advice from a professional financial adviser.
HSBC has partnered with Everfi to create a series of modules on a variety of topics, including Savings, Banking, Credit Cards & Interest Rates, Credit Scores, Financing Higher Education, Renting vs. Owning, Taxes and Insurance, Consumer Protection, and Investing, giving you the tools to better manage your financial future. We hope these interactive digital modules can support your choices.
Additionally, HSBC has created the YourMoneyCounts financial wellness program which is presented by HSBC staff to the community in a classroom setting. Participant workbooks covering Budgeting, Credit, and Identity Theft and a budgeting worksheet are found through the YourMoneyCount link above. This program was created in partnership with the national nonprofit Greenpath Financial Wellness, and they provide free individualized support focused on your personal situation and financial wellness.