Five ways to save and invest for a comfortable retirement
Want to make your retirement savings work harder for you? Learn how you can boost your nest egg and enjoy a more secure future. Start planning today for the retirement you’ve always dreamed of.
This article is not advice. If you would like to receive advice on your savings and investments, consider speaking to a Financial Adviser.
Last updated: 1 August 2024
Retirement is a time to relax and reward yourself for years of work. But to enjoy an easy lifestyle during these years, it’s essential to save and invest wisely. While paying into a workplace pension is a great way to save for the future, there are many other ways to boost your nest egg. This post explains some of the saving options you have beyond your pension.
1. Start early (or today)
Starting to save as early as possible is one of the most important things you can do to secure a comfortable retirement. With the potential to enjoy compound interest, the earlier you begin, the better off you’ll be. Putting away a smaller amount across a longer horizon can have a greater impact than a larger amount over a short period.
Learn more: The benefits of compound interest
2. Keep money in a savings account
Keeping some of your retirement money in a savings account can provide peace of mind and easy access to your money. If you haven’t done so already, it’s a good idea to build a cash fund to cover any unexpected expenses beyond your other income. Advisers tend to recommend holding 3-6 months’ worth of cash before investing in other riskier assets. You can also choose a mix of multiple savings accounts with different terms to maximise returns while having an emergency stash to fall back on.
3. Diversify your investments
By diversifying your investments, you can minimise your exposure to risk and potentially improve your returns. This means investing in a variety of different asset types such as stocks, cash, and property – so if one asset takes a loss, it shouldn’t affect the others.
Investing in a buy-to-let property can provide a steady income stream in retirement. It can also grow in value over time, generating a source of future capital gains. And although there are risks involved, investing in the stock market has the potential to boost your retirement income.
Read more: Building a diversified portfolio
4. Consider the tax implications
When saving for retirement, it's smart to think about the tax implications of your investments. There are tax-efficient savings options available in the UK, including Individual Savings Accounts (ISAs) and Self-Invested Personal Pensions (SIPPs). They can offer tax benefits and help you increase your savings.
Read our guide: Tax-efficient retirement planning
5. Review and adjust your strategy regularly
It's important to review and adjust your retirement savings strategy regularly. This will help you stay on track towards your retirement goal and ensure that you are making the most of tax-efficient options. As your circumstances change, for example a change in income or retirement goals, it's necessary to adapt your plan. Using a cash deposit platform can help you keep on top of your cash savings and change tack quickly if needed.
How you save and invest for retirement entirely depends on your individual needs, goals, and openness to risk. There are many different options to consider, but it’s never too early (or late) to start saving for retirement.
Flagstone’s mission is to support you with saving for your senior years. Our platform helps you protect and grow your wealth, so you can be certain you’re making the most of your nest egg.
