The best time to start building a pension is when you’re still young. However, many of us inevitably put it off to focus on more short-term financial goals. This results in a lot of us getting closer to retirement age with no pension pot to look forward to. Fortunately, providing that you still have a few years left before you plan to retire, there is still enough time to start saving. Below are just a few tips on how you can start quickly building a pension so that you’re not struggling to get by when you retire.
Increase your pension contributions
If you haven’t been contributing any money to your pension, then now is obviously a good time to start setting aside something. If you’ve been contributing small amounts here and there, it could be worth increasing your contributions so that you can build a retirement fund more quickly. Work out exactly how much more you’re able to contribute and whether you can make any cutbacks to help.
Work with a financial advisor
You may be able to work with a financial advisor to plan a strategy. When looking for a credible financial advisor online, look out for qualifications and awards. You should be able to find these in a financial advisor’s personal bio – this bio from Raj Kalyandurg is a good example. Reviews can also be a good indicator as to how trustworthy a financial advisor is. Be wary that financial advisor rates can vary, so it’s worth shopping around.
Invest in high growth stocks
High growth stocks are stocks that increase in value at a much higher rate than regular stocks. They typically include big tech companies and energy companies. Putting your money into these stocks will allow you to grow your money much more quickly than if it were in a savings account. Of course, high growth stocks do come with their risks, so you don’t want to invest too much into them. It’s also important to keep an eye on stock prices and set loss limits so that you can pull out quickly if a company’s stock starts losing value.
Plan to downsize – or consider an equity release
If you own a home, you may already have access to equity which you could put towards your retirement. Many people find it beneficial to downsize in retirement – a smaller house is not only likely to be easier to manage in retirement but also a lot cheaper to buy, allowing you to sell your current home and free up huge amounts of cash. An equity release could be another option to consider for when you retire. This involves borrowing a sum of money equal to the amount of value your home has gained since you bought it. This only has to be paid back if you sell or when you die.
Find new passive income streams
By earning more money, you can put more money towards your pension. Passive income streams are ideal – they typically require an investment of time and effort upfront, but then allow you to keep receiving money in the long run without having to put in much regular work. Such passive income streams could continue to give you money once you retire. Examples of passive incomes include renting out property, investing in dividend stocks, selling an online course, publishing an e-book or making ad revenue off of a website/YouTube channel. This article by Kathleen Coxwell lists a few different potential income streams.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)