Retirement is something to look forward to. If you have spent your adult life working hard, building a successful business and making every second count, you deserve to enjoy retirement. Unfortunately, for many people it doesn’t quite pan out like that.
When money is tight, retirement is something to be endured rather than enjoyed, so it makes sense to start planning your financial future sooner rather than later. One way to do this is to start investing in your 20s. Below, we will discuss a few easy and simple ways for entrepreneurs to build and grow their retirement nest egg.
Start Investing Early
There are many ways to build a nest egg, but if you have time on your hands, a savvy investment plan is likely to yield the biggest gains. Investing for the short term is risky because the stock market is apt to jump up and down in response to market forces, economic woes and financial crises. Building a long-term investment portfolio makes it a lot easier to weather the peaks and troughs, so your risks are minimized.
By planning an investment strategy from your 20s onwards, you can start to build a decent nest egg early. You might not always pick the right investment vehicles, but over time, the gains will exceed any losses you make. You will also have the benefit of compound interest on your side, which adds a great deal to the pot over time.
Property makes a great long-term investment and if you are able to pour your spare cash into the right properties, you can easily build a substantial nest egg for retirement.
Whilst property is a good capital investment, don’t forget that you can also use investment property to generate an income. If you take on tenants for your properties, you can enjoy a regular monthly income in the form of rental payments. There will be costs involved in renting out property, but these can be used to offset any tax payable on your rental income.
A traditional pension is a common way to build a retirement nest egg. Annuities have a bad reputation, but there are now rules in place to ensure you never outlive your pension pot. However, always take advice from a pension’s expert before you start creating your own pension.
If you have set up a retirement plan through your company, pay as much into it as possible as the company has to make matching contributions. Ideally start saving into your company pension as soon as possible, as your money will have more time to grow tax-free this way.
Save First, Spend Later
The temptation is often to spend not save, but this attitude will not help you when you reach retirement on a measly income. Create a retirement plan from a young age and build your business and life around it. The outcome is likely to be far more positive and you can look forward to a financially comfortable retirement.