Finance at Forty

Are you a woman in your 40s who was suddenly hit by the realisation that you haven't yet started planning your retirement? If so, read on.

Fix an amount as an annual income from investments when you retire and figure out how much your regular sources of income will contribute to this annual sum.

It is natural to feel confused by the assault of questions crossing your mind, but let me tell you that it is never too late to start getting your finances in order. It is all about the lifestyle you want to indulge in when your hustling days are behind you.

Empower yourself with these five basic tips to kick-start your retirement pot:

Define Yourself
Understand who you are as a person. This helps you understand your position in life better, which will in turn help you figure out where you will want to be 10 years down the lane. Are you a single and independent woman? Are you a stable job holder who enjoys job security or a contractual employee? Do you have any dependents who rely on you for financial support or are you free from any financial obligations? It will be difficult to formulate a viable retirement plan without a clear idea of the future, as a certain amount of foresight is very integral to planning and executing a retirement plan successfully.

Set Lifestyle Targets
You know yourself and your tastes better than anyone else. So, you alone will be able to set a lifestyle target for your retirement days. When you finally log out of work permanently, what sort of a life do you want to lead? Do you want to retire into luxury, travel the world, or find yourself a cabin in the mountains and pick up a new skill? Whichever sort of lifestyle you opt for, you will need money to maintain it. Your retirement pot should be big enough and stable enough to fulfil your retirement plans without any hassle.

Review Your Finances
Take a moment to pause, breathe, and review your finances. This is an important step that you simply cannot skip because you need absolute clarity on where your finances stand before you can make a plan to help your finances reach where you want them to be a few years down the line. Prepare a simple table that lists the four basic foundations you should consider while making your financial plan: life insurance, critical illness, health insurance, and retirement.

Do the Math
Do this math today itself to get started with your retirement planning. How much money do you need per month to run your life? Now figure out where that money is coming from. This helps you arrive at the number you need as your liquid cash and how much you need to save in order to have a solid annuity when you retire. Once you have an idea of the figures, get down to the calculations. Fix an amount as an annual income from investments when you retire and figure out how much your regular sources of income will contribute to this annual sum.

Stick to the Plan
This is a simple enough tip. But it is also one of the hardest to follow for many people, especially in a world that changes so often and economies that are so volatile. Once you chalk out a feasible retirement plan that will cover your retirement needs sufficiently, make sure you put in as much effort to ensure that you see it through to the end. Keep your plan flexible, but only for improvements.