You’re approaching retirement, what now…

You’ve worked your whole life and suddenly retirement is on the horizon. It can seem as if you’re approaching retirement at a time of unprecedented uncertainty. The COVID-19 pandemic may have wreaked havoc on your savings. There are serious discussions underway about increasing the retirement age in Trinidad and Tobago from 60 to 65. And, globally, people are living longer, meaning that you’ll need more money to support you than ever before.

Does this mean you should panic? Definitely not! Instead, this would be a good opportunity to review your retirement plan or craft a plan if you haven’t made one yet. And, even if a potential increase in retirement age affects you, you can use your additional working years to create the retirement you’ve always wanted. So, let’s look at three easy steps to make that dream retirement a reality.

Work out how much you need to save for retirement

It’s time to consider your existing savings and your debts as well as what your post-retirement spending will look like. It’s a good idea to itemize your expenses; usual monthly costs include:

• Regular bills like electricity, water, phone, internet and cable
• Rent or mortgage if applicable. Even if you own your home, you may need to allocate money to maintain it.
• Food and drinks
• Toiletries
• Transportation
• Clothing
• Medical expenses
• Any charitable donations you may wish to continue
• Entertainment expenses, for example restaurants, spa treatments or movies
• Pet care, if applicable
• Any other expenses, for example, your retirement plan may involve travel to new countries or picking up a new hobby.
• Don’t forget that even retirees need an emergency fund.

Let’s say you’ll need to be able to pay for those expenses for the next twenty years. Subtract your debts from your savings and you’ll know how much money you have at the moment. Next, determine if you’ll have any income in your retirement; for example, you may be eligible for a pension or you may consider renting out a room in your home for additional earnings. This should give you an accurate picture of how much money you’ll need, how much money you have and how much more capital or post-retirement income you should accumulate.

Understand your timeline

Identify your current age and your expected retirement age. It would be a good idea to create two retirement timelines: one if you retire at 60 and one if you retire at 65. If your line of work allows you to retire earlier or later, then you should take that age into consideration instead.

Then, consider your own unique situation and how you want to use your time until retirement. For example, you may want to stick to a budget to augment savings. Or you may want to tackle debt so that you’re not making hefty loan payments in your retirement years. If your ‘to-do’ list seems overwhelming, break it into manageable chunks. Remember, you don’t have to make all these changes at once and any positive changes you make will help you to have a better retirement.

Maximize your investments

If you’re close to retirement age, you shouldn’t be considering riskier investments like volatile stock or cryptocurrency. These investments often involve big swings and you don’t want to seriously deplete your retirement savings if you may need that money in a few years’ time. However, this doesn’t mean that your money should just sit in the bank either.

You can consider a secure investment, like an annuity. An annuity is a financial product that allows you to pay premiums and then receive regular or lump sum payments in the future, upon maturity of the plan or at retirement. The Maritime TRIflex annuity allows you to create a personalized plan to suit your needs. You can choose among three investments funds among which you may allocate your premiums. And there are no charges so all your payments will be working for you from your first deposit.
You can also reap the benefits of an annuity before retirement. Contributions to a registered annuity, like TRIflex, are tax-exempt up to specified maximum amounts per year. So, you can deduct annuity payments from your taxes. Think of it like being paid now to save for retirement. And, when you do retire, you have a guaranteed stream of income.

So what now…

The most important thing to remember is that you are not alone. You can continue to conduct your own research, you can talk to peers who are also approaching retirement and you can reach out to a financial advisor to help with your retirement planning. No matter what the future holds, you can begin –or continue–to plan for a retirement that will be happy, fulfilling and secure.