Longevity is becoming better and better and people are living longer than in any other historic period. Today with every 4 years the average lifespan of a human being is increasing by about 1 year and that is quite remarkable. Our modern advancements in medicine and science have allowed doctors to cure various illnesses that allow people to live longer and more comfortable lives. But this longevity also poses some unexpected risks because our social security systems are not designed for pensions that would last 40 or 50 years. That is why the best course of action is to start saving for your pensions years when you are working by creating savings accounts and periodically adding money in those accounts. Of course it is not easy to save a portion of your earning but if you want to live comfortably even when you won’t be able to work then you have no other choice. Here are some methods that you can use to help yourself achieve a financially stable retirement.

  • Automate savings – the first thing that you can do is to create automatic payments inside your savings account. In almost all commercial banks you can create a system where when you get some money in your bank account then immediately a portion of it is transferred into your retirement account. Because that process is automated and you will not see the money then it will be easier to manage your finances without it. But if you wait until the last day of the month before doing that payment yourself, in most cases, you will have spent it all and there won’t be anything left for your savings account.
  • Use the largest interest savings funds – if you are saving for your pension then the best thing you can do is to find a high interest savings account because that interest will accumulate over time and you will get much faster growth from a 5% interest account than from a 2% account. But be careful not to get into some kind of a scam because you only get one chance at this and if you have some doubts about that financial institution then either move your money elsewhere or split it to save a portion in a much more trust-wordy account. If you are young then you can afford much more riskier investments and savings but if you have only 10 or 15 years left then you need something stable so that you can save enough for a comfortable life after you have retired.
  • Use spare cash for savings – if you get a bonus at work or at the end of the month you see that there is still some money left in your bank account then you should transfer it to those long term savings not simply spend it on some meaningless stuff. Most of the time when people get some unplanned income they can almost instantly find some ways how to spend that money but the best course of action is to save it and with the help of interest payments grow that money.
  • Don’t use loans – when you are saving up for retirement one of the worst things you can do is to use loans and borrow money. When you borrow money you have to pay interest on those loans and that means you are loosing money that you could have saved up for retirement. Usually over the course of the loans repayment lenders will repay up to 50% more money than they have borrowed (if you borrow 5000 Lari then you will repay 5000 as the principal and up to 2500 as interest). That is why if you can then try to save up money and buy everything without those expensive loans.
  • Start young – when you are saving up for retirement then the sooner you start saving the sooner you will be able to accumulate interest and that means that your money will grow by itself. And because usually savings accounts can get compound interest then your money can grow exponentially as the interest will be calculated not just from your initial investment but also from the already earned interest payments. If you start saving in your twenties then by the time that you reach retirement age your money will have grown quite a bit and you can use those online compound interest calculators to see the awesome power of this phenomenon.