No pension what should I do!
Straight out of the gate, you want to get as firm a handle on your finances as possible, really getting a full lay of your financial landscape. You need to know how much money you have coming in, and you need to know exactly how much money you have going out on a month-to-month basis.
Cash flow numbers are critical, especially if you hope to retire without a pension.
After that, though, you want to look for ways to increase your earning potential (lateral moves to other companies, asking for raises, building side hustles and other streams of income, etc.) and reduce your overall expenses.
This isn’t to suggest that you need to work yourself to the bone just to hope to retire eventually or that you have to cut out every bit of fun and entertainment from your budget, either.
But you do need to get a handle on things financially. You need to understand where you are right now before you can start building for the future.
Figure out what your cash flow numbers look like, and you’ll be ready to move forward.
This article will explore some of the options available to you if you have no retirement savings and are starting to think about your next steps.
Start with a plan
When it comes to retirement planning, having a plan is essential. Without a plan, it can be difficult to know where to start.
Figure out where you are starting from and what good looks like for you
- What is your current pre-retirement income?
- What’s your current networth?
- What does financial security mean to you?
- What social security payments could you expect to receive in retirement?
- What sort of retirement lifestyle are you looking for?
- At what age do you want to retire – full retirement age 65?
With answers to these, you can start to figure out what actions you need to take to bridge any gaps or create more money.
Get out of debt
One of the most important steps you can take on the road to retirement – without a pension – is getting out of debt.
Especially expensive debt like credit card debt, car loans and personal loans.
Debt can be an incredible drag on your finances, preventing you from saving for the future and often leading to stress and anxiety.
If you’re looking to retire without a pension, you must focus on getting out of debt as quickly as possible.
There are a number of different ways to do this, but some of the most effective include:
-Making a budget and sticking to it can be difficult, but it’s critical if you want to get out of debt. Know where your money is going and ensure you’re not spending more than you can afford.
-Cutting expenses: Take a close look at your budget and see where you can cut back. There may be areas where you can save money without making major changes to your lifestyle.
-Consolidating debt: If you have multiple debts, consolidating them into one loan can help you save money on interest and make it easier to pay off your debt.
-Making extra payments: Make extra payments on your debt whenever you can. Even small amounts can make a big difference over time.
Getting out of debt is one of the best things you can do for your financial future – no matter how you hope to retire.
Build Your Own Pension
There are “pension-Esque” retirement plans that you can build on your own, and you will want to start taking advantage of them just as quickly as you can.
In the United States, you could build your pension by contributing to what’s called a 401(k).
This plan is designed to help people build and grow a retirement nest egg.
Not only does it enjoy a whole host of tax benefits, it’s also structured in such a way that you’re not going to have to worry too much about monitoring it every day (or even every week).
This kind of plan would be called a Self Invested Personal Pension or SIPP in the United Kingdom.
It features a lot of the same benefits as a 401(k) in the United States, and you’ll want to look into setting one of these up ASAP.
Lean into and leverage any other investment opportunities or retirement plans you can. There are an almost unlimited amount of options out there to help you build and grow your retirement nest egg, even if you are closer to retirement age.
Start saving for retirement.
One of the most important things you can do to make sure you can retire without a pension is to start saving money as soon as possible.
Saving money may seem difficult in the present, but if you start early and make it a habit, you’ll be in good shape for the future.
There are several different ways to save money for retirement, but some of the most popular include:
-Contributing to a personal pension / 401(k) or other retirement plans: This is one of the easiest and most popular ways to save for retirement. Your contributions are automatically deducted from your paycheck, so you don’t have to worry about remembering to save each month. Plus, the money grows tax-free until you withdraw it in retirement.
-Building a savings account is another easy way to save for retirement. Simply deposit a fixed amount of money into your monthly savings account and let it grow over time.
-Investing in stocks or mutual funds: If you have a little more money to work with, investing in stocks or mutual funds can be a great way to grow your retirement savings. Just be sure to research which investments are right for you and talk to a financial planner if you have any questions.
Whatever method you choose, the important thing is to start saving now. The sooner you start, the more time your money will have to grow.
It’s Never to Late to Start Investing
Secondly, you’ll want to get comfortable with – and very active in – the world of investing.
Compound interest is one of the most powerful forces in the investing universe, and if you are a little later to the game, you might have to get comfortable with the fact that you’ve given up some of that leverage just because of the passage of time.
At the same time, though, this doesn’t mean that you should avoid investing altogether.
Investing in the world’s great companies through low-cost index funds will still allow you to grow your money and maintain your purchasing power over the long term.
You could live for 30+ years in retirement!
Consider a Side Hustle (or Two!)
Of course, it’s never a bad idea to come up with a side hustle – or two (or several) – that you can use to generate extra income to funnel into your retirement accounts, and investments to cover your retirement expenses.
Could you continue your current role as a part-time job or in a consultancy capacity?
Using the experience you’ve built in your career to create products or services where you can keep the bulk of the profits.
Find ways to monetize your hobbies or monetize the free time you have. Can you use your skills, experience or hobbies to earn income?
At the end of the day, there are more income-producing opportunities today than any other time in human history.
It’s possible to build a truly global business from your back bedroom with next to no money at all – and even better than that is you’re able to hire and outsource the bulk of the work to people around the world, really putting these kinds of income sources on autopilot.
That’s not a bad way to fund your retirement (whether you have a pension or not, even)!
Closing Thoughts: I have no pension what should I do?
All in all, you mustn’t let the absence of a pension make you gun shy about retirement.
Sure, a pension is nice to have. It’s a solid foundation to build and fund your retirement off of.
At the same time, though, there are unlimited opportunities out there that you can take advantage of – without a lot of headache, hassle, and any real special skills required – to build and grow retirement investments or retirement income streams.
If you would like help with your retirement plan, why not set up a call with us.
FAQ: I have no pension what should I do?
Is it possible to retire without a pension?
It’s not impossible to retire without a pension, but it might be more difficult.
There are a few options for retirement savings, such as ISAs, SIPPS, and annuities. It’s important to start saving for retirement early and contributing as much as possible.
If you don’t have a pension, you’ll need to ensure that your other income sources are sufficient to cover your living expenses in retirement.
Working part-time and/or social security benefits may also be available if you qualify as a source of income. You may also need to look at reducing your cost of living to live within your means.
What happens if you retire with no savings?
If you’re facing retirement with no savings, then you may not have much to fall back on if anything bad happens. Here are a few steps you can take to ensure that you can still enjoy a comfortable retired life
First, closely examine your budget and see where you can cut back on expenses. While you may not be able to reduce your spending, eliminating unnecessary costs dramatically can free up some money that you can put towards savings.
Second, consider downsizing your home or making other changes that will lower your monthly expenses. This could involve moving to a smaller home or relocating to a cheaper area.
Third, think about ways to supplement your income. Working part-time or starting a small business can bring in some extra money that can help cover your costs.
Fourth, tap into any available resources, such as social security benefits or track down pensions you may have from previous employment.
Finally, make sure you have an emergency fund in place so that you can cover unexpected costs. This could help you avoid slipping into your retirement savings if something arises.
What is the best way to save for retirement if I don’t have a pension?
There are a few different ways to save for retirement if you don’t have a pension.
One option is to contribute to your work-based pension plan.
Another possibility is to save money in a regular savings account.
You can also invest in stocks, bonds, and other investment vehicles.
Remember that you’ll want to start saving as early as possible so that your money has time to grow.
Is it ever too late to start a pension?
No, it is never too late to start a pension.
Even if you are already retired, you can still improve your financial situation by managing your money, cutting expenses and looking for ways to make more money.
Do I really need a pension?
It depends on your circumstances. Generally speaking, a pension can be a good way to save for retirement and ensure a steady income.
However, other options are also available, such as creating income-generating assets like businesses, property and the stock market that can provide you with an income now and later in life.