Emirates Islamic Bank is one such bank offering exclusive Islamic banking products in the UAE, with the Emirates Islamic Bank zero balance accounts being among the most preferred savings accounts in the UAE.
Saving and investing for your retirement can help you maintain your lifestyle and turn your old-age days into a golden period. Retirement is one of the critical events that most of us will experience sooner or later in our lives. From a financial perspective, we must start planning our finances in order to retire comfortably.
As it involves complexity and time for an investment to grow and make profits, starting at an early age is the best idea. It takes sensible planning and years of persistence to plan a successful retirement. Even if you are there at your retirement age, it needs to be constantly taken care of as an ongoing responsibility.
Most people just prefer saving funds in their bank accounts rather than investing them in high-risk investment options. In this post, we will share a few effective tips on simple investments for a sound retirement.
The sooner you start planning your retirement, the better it turns out to be. The amount that you need for sound retirement differs from person to person. However, here are a few tips to help you figure out how much you need to save.
Before you start planning your retirement, you must know how much time you have between today and your retirement day. This could be an effective initial strategy to come up with a useful investment plan. The longer time you get to plan and implement, the higher the level of risk you can withstand. For instance, if you have over 30 years until retirement, you can consider going for riskier options like investing in stocks and bonds. The factor that plays a critical role here is ‘time’. The idea is to have enough time to gain returns and outpace inflation, so you maintain your purchasing capabilities active even during retirement.
To define the required size of your retirement portfolio, you must have an idea of post-retirement spending needs. Most people assume that their spending after retirement will reduce 20 to 30 per cent of what they spend currently. In some cases, such assumptions have proven to be unrealistic, especially in the event when unforeseen medical expenses arise at an older age. Most retirees spend their initial retirement years in travelling and achieving other bucket-list goals. In order to have enough savings, you must target a ratio closer to 100 per cent.
Your net worth is a number that lies between the assets that you own and the liabilities that you owe. You must first analyse the amount you have in your hands.
What you own includes:
And what you owe, on the other hand, includes debts such as:
You can subtract your liabilities from your assets to calculate your net worth. With this number, you can have a fair idea of where you stand and how you need to go about your future investments. You must track your net worth once a year so that you head in the right financial direction. This helps you to stay on track with your retirement goals.
In the UAE, banks, insurance companies and other financial institutions offer attractive retirement investment options. These options include bank account investments, fixed deposits, mutual funds, bonds, cash investments and many others.
Here is a list of investment options you can consider when planning your retirement.
You must start saving early, no matter what type of bank account you open or which investment option you choose.
Here are the main reasons why you must start saving and investing at an early age.
The investment you make at the age of 20 years helps you gain more profits than the one you make at the age of 40, even if it grows conservatively by 5 per cent every year.
Make sure you keep your emotions in check when investing. Sometimes your investments get influenced by your emotions in a way that you don’t even realise. Underestimating risk and making bad financial decisions due to overconfidence represents the typical pattern of emotional behaviour.
Investments surely open a lucrative path to a comfortable retirement. However, you must also be open to the fact that not every investment will turn into huge profits, making you a winner. Make sure you are realistic and be mindful of your wins and losses. Contact our experts anytime to discover suitable investment options based on your financial preferences if you have any doubts. We at Policy Bazaar will help you determine your financial needs and suggest the best-fit investment options accordingly.