We are living longer and longer and the time you will spend withdrawn from the labor market will not be a few years. Surely you imagine yourself doing what, after a lifetime of work and effort, you finally deserve, but will the pension you will receive be enough?
According to the forecasts of the European Commission itself, in 2050 public pensions in Spain will only cover half of your last salary. Therefore, if you do not want your standard of living to drop, it seems clear that you will have to have some complement. How about you start generating your payroll of the future? It is about starting to build savings thinking about paying yourself from the moment you retire.
For example, imagine that you want to have an extra salary of 500 euros per month to complete your pension in the future. If you start saving with that goal at age 40, that means you should set aside about $200 every month. With that plan, you would have at least a decade of peace of mind.
But you don’t have to be satisfied only with what you are able to save based on sacrifice and discipline. You can multiply your savings with the same effort, if instead of depositing the money in your account you do it in a product that generates a little profitability.
Do you want to see how? Using the previous example, with the same savings of 200 euros per month, but investing in a product that gives you a 4% return, you would get an extra salary of 900 euros for your retirement. Almost double! It’s not magic, it’s the effect of compound interest and it’s all about ‘putting your money to work’.
In addition, you will be counteracting the effect of inflation, since if you park your money in the account it will lose value over the years only due to the increase in the cost of living.
Wanting to buy a second home on the beach in 10 years is not the same as changing your car in two. The objectives for which you save are important, but it is even more important to reach them to know how much you should save per month. These are some of the keys that you should keep in mind:
This last point is perhaps one of the most important, since it will prevent you from becoming discouraged or overwhelmed with the result. It is possible that when you start this exercise, add up the value of all your goals and divide it by the months remaining until they materialize, you will realize that with your current savings capacity you will not get there.
In this case, there are two things that you should take into account: you can rely on products such as investment funds or savings insurance to accelerate the speed at which you can save and build a cushion more easily, generating interest for your money . On the other hand, the most normal thing in the world is that you don’t know where to start. For this reason, there are professionals who are experts in this as advisers who can accompany you when planning for the future, drawing up a plan and choosing the most appropriate products and level of risk for you.
