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Home›Saving›Retirement Savings Tips: How to Save in Your 20s, 30s, 40s and 50s | Personal finance | Finance

Retirement Savings Tips: How to Save in Your 20s, 30s, 40s and 50s | Personal finance | Finance

By Hector C. Kimble
February 20, 2022
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Saving for retirement is an important financial responsibility for people of all ages, but the strategy used by someone in their 20s may differ from that of someone in their 40s or older. Avi Shah, Financial Advisor, Hoxton Capital Management, spoke exclusively to Express.co.uk and provided insight into the best way for Britons to save for retirement at different stages of their lives.

Mr Shah provided a rule of thumb to help Brits start their retirement pot.

He said, “Saving for retirement at any age requires discipline above all else. Whether you’re in your 20s, 30s, 40s or older, you should designate a portion of your monthly income to be set aside and invested for later.

“It can be 10%, 20% or more, depending on personal circumstances, but consider it a personal imposition.”

He added that it allows people to invest at a constant rate by taking advantage of peaks and troughs in the investment market over many years.

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Retirement savings for 30- and 40-somethings

As a person ages, they are likely to change their approach to saving for retirement. Mr Shah explained how someone in their 30s and 40s should go about it.

He said: ‘Monthly incomes tend to be slightly higher in your 30s or 40s and therefore more money should be set aside each month. Retirement in 25 years may seem like a long time, but 300 paydays is not!

“Investing for retirement in your 30s or 40s isn’t all that different, although you may want to consider assets with a bit less volatility/risk.

“Introducing fixed income securities to the pension plan helps counter some of the potential volatility that stock markets are known for.

“This can be in the form of bonds or even investment properties that provide a more stable return on investment.”

Retirement savings for fifty-somethings

Once someone hits their 50s, retirement will become much more of a reality, and as such, Shah believes retirement planning will often start to take a different approach.

He explained: “The key here will be capital preservation versus investment returns for most individuals, as they have less time to recover from any short-term underperformance of their investments.

“A more diversified asset portfolio is often the route of choice for most when looking to hedge their risk.

“The contribution to pension plans at this stage should be significant, as professionals are normally approaching the peak of their earning potential, and this is the last stage of the asset accumulation mode.

“A basket of equities (stocks/stocks), fixed income, real estate, are just some of the shortlist items for a well-diversified 50+ retirement portfolio.”

Despite the various approaches people may take to retirement savings at different stages of their lives, some principles may apply to everyone.

Mr. Shah concluded, “At any age, the key to saving for retirement is discipline.

“That might mean a few fewer beers on weekends in your 20s, a few fewer roses on Valentine’s Day in your 30s, a four-star hotel rather than a five-star hotel in your 40s, or fewer parties. golf at 50.”

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