How To Make Enough Money To Retire

7 steps you can take if you don't have enough money to retire

If you're worried you won't have saved enough for your retirement, you're not alone. According to Schroders Global Investor Study (GIS) 2020, 41% of investors around the globe fear they won't have sufficient savings to fund their lifestyle in retirement.

Knowing how much you should save for the retirement you desire is never easy. Over time, your needs and aspirations change, and your income will almost certainly fluctuate too.

If the past year has proved anything, it's how impossible it can be to predict anything with certainty. This perhaps goes some way to explaining why so many of us are concerned about running out of money when we're retired.

If you knew exactly how much you'd earn during your working life, if you had a crystal ball to tell you how much your investments would return and how long you'd need to fund your retirement, financial planning would be simple.

Have you imagined your retirement, if it ended up that you can't afford to pay for it? It may not be so nice or comfortable, fortunately there are flexible ways to manage a shortfall in retirement savings.

Here are seven suggestions for your consideration.

1. Delay retirement and keep earning

Retirement isn't as popular as it once was. More people are choosing to put it off, opting instead for a semi-retirement or abandoning the idea altogether, depending on their circumstances and type of job.

This is a great solution if, having done the sums, you know you don't really have enough to afford your lifestyle, or you will have to make drastic or undesirable changes to the way you live.

By choosing to continue to work now, you can spend the extra time earning money and put more away into savings and/or investments to make sure you can afford your later years, when you have no option but to slow down or retire from work.

2. Make some extra cash

The best way to increase your retirement fund is to make more money. You can do this by continuing to work in the same job as we just noted, or, as many people do, by taking on a new challenge or part-time job.

Even when you're at or around retirement age, there are various options for making money. Thanks to many countries' anti-age discriminatory legislation it's perfectly possible for you to continue working for the company you're currently employed by beyond the usual retirement age.

There are many advantages to continuing to work: it keeps your brain active, which comes with additional health benefits, and it gets you out of the house and socialising with people. You could even set up your own business and create a whole world of new possibilities.

If you don't want to keep working, there are other ways you could supplement your income, including:

Rent some space – if you have a spare room, you could consider letting it full-time, or use Airbnb to rent it out on a part-time basis. If this idea appeals, you could go a step further and rent out your entire house for periods of time – you just need to make sure you have somewhere to stay.
Use your skills – if you don't wish to continue working on a permanent basis, you could consider getting a paid non-executive directorship or using your experience to work on a consultancy basis.

3. Invest while there's still time

If you're in your fifties or sixties, there's still time to make investments and boost your savings pot. Seek advice about the best kind of investment to suit your timescale and goal from an expert financial planner.

We specialise in building and managing people's wealth and can advise you on where and how to make the right investments for the outcome you desire.

4. Invest to generate an income

Many investible assets can generate a regular income such as bonds, dividends from equities and, an old favourite of many, perhaps due to the leveraging effect of a mortgage, property.

If you have enough cash for a deposit, you may want to consider investing in property.

Make sure you do your research first by checking out what you might be able to afford and how much rental income you could make.

Things you'll need to take into consideration include the location and type of property, the average rental price for similar properties in the area and expected maintenance costs. Talk to local estate agents and see if the plan stacks up for you and your circumstances before you commit.

5. Sell up and downsize to a cheaper property

Selling the family home and buying somewhere smaller is a common way to fund retirement or boost funds. One in three people even think of their property as the primary way of funding their retirement.

If you're ready to retire, maybe you don't have to remain in Hong Kong where property prices may be higher than elsewhere. Consider relocating overseas and spend your retirement years somewhere which offers cleaner air and more space for substantially less money.

Selling up and living off the profit you make by downsizing or relocating may be the perfect solution for you.

6. Discover what state support might be available

Depending on where you live or where you are from, you may be eligible for support from the state in retirement. If you are eligible, it may be worth purchasing a state retirement income. The benefit of doing this is that from a certain age, a guaranteed income for the rest of your life is payable.

The turbulent global economy coupled with longer life expectancies has spurred many governments to increase the age citizens can receive money from social security plans. The hope is that this will minimize the number of people in the system.

While not every country helps to provide people with an adequate retirement income, it's worth investigating what you might be eligible for.

7. Work with a financial planner

If you are able to continue working, review your outgoings and see if there are costs you could save in order to divert more cash into your pension fund.

Taking financial advice and talking things through with a financial planner will help you set goals and make strategic plans to work towards funding the retirement you desire when the time is right.

If you need to make up for a shortfall in your retirement savings and want to explore your options, we can help put you on the right track and give you peace of mind.

We specialise in building, managing, and preserving the wealth of Hong Kong's international community. By creating a personalised, comprehensive financial plan, we can help you realise and achieve your greatest goals in life.

For more information, email info@bmpwealth.com or call +852 3975 2878.

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