You’re still in your twenties and thirties and retirement is at least thirty years away. You have enough time before you start planning for retirement. I mean, you haven’t been working for ten years yet. It’s definitely too early to starting thinking about retiring.
Right? Wrong!
It is never too early to start planning for your retirement. And the best time to start is now. Yes, I know it’s some ways off but by the time you reach retirement age, you should have a comfortable amount of money to help you through that stage of your life.
Based on statistics, the life expectancy of the average Barbadian (males and females) is approximately seventy-five years. If you retire at the age of sixty-five, you have at least another ten years to live! Let’s do some basic Maths to see what figures we’re talking.
1. Based on the life expectancy figures, you will have ten years (120 months) where you will not be working.
2. Assume that your monthly expenses could be about $500 a month (this includes your bills, food, home maintenance and other incidentals). This is a very low figure, but you can substitute higher numbers if you wish.
3. When you multiply 120 by 500, you get a whopping figure of $60,000!!! And this is on the low end and I have not even taken inflation and tax increases into consideration.
What can you do now? Here is an idea of what your retirement savings could look like if you saved $100 per month until you hit 65:
| AGE |
Time before retirement (Years) |
Time before retirement (Months) |
Retirement savings ($100 a month) |
|
25 |
40 |
480 |
48,000 |
|
30 |
35 |
420 |
42,000 |
|
35 |
30 |
360 |
36,000 |
|
40 |
25 |
300 |
30,000 |
|
45 |
20 | 240 |
24,000 |
Based on my simple calculations (which do not include any interest which would be accumulated if you save on a bank account), you will just fall short of the $60,000 target.
This is not to alarm you, just to get you thinking. One of my former bosses, lamented the fact that no one explained the importance of saving towards retirement at an early age.