What’s Your Financial Game Plan for your Retirement ?

Lovely Tuesday evening in London while writing a blog post…time to reflect and plan forward.

Do you have a gameplan for your retirement finances ? In below graph you can see the current pension for the different employee types. If you have a business and you didn’t save money for your retirement, you are really screwed in Belgium.

59% of the Belgian retired people wish they had saved more money for their retirement, a Schroders Global Investor Study 2017 revealed.

Worldwide research in 30 countries learned us that people don’t save enough for their retirement. People who haven’t retired save on average 11,4% of their yearly income. More than 66% of the retirees wish they had saved more.

How do people save for their retirement ? 

Savings accounts are the main source of pension income. Other sources of income are real estate rent income (6% in Belgium vs 7% worldwide), money from family (7%), part-time job (5% n Belgium), inheritance (6%) and selling the house (3%).

30% of the retirees want to make money from their hobbies. Many retirees in Belgium escape the poverty as they are owner of a house. If you don’t own a house, you risk to end up in poverty…

My Game Plan 1.0

My game plan for my retirement consists of 4 pillars :

1. Pension Fund : As the government sponsors tax deduction of 30% when you invest in a pension fund, I save the maximum amount (940 Euro). The government also offers a 25% tax deduction when you save more, but I don’t take that bite as you hardly gain anything… I started this pension fund when I was almost 10 years younger so I have saved so far a decent amount. The younger you start, the better…
2. Pension Plan with your employer (Group insurance plan) : when your employer offers a pension fund plan, don’t hesitate and take it as this will help you to build that extra money for your retirement. When you chose a company to work for, check whether they offer a retirement plan. I worked for three employers and they always offered a retirement plan. Otherwise I wouldn’t have started there in the first place.. 🙂
3. Dividend Portfolio : My dividend and options portfolio is definitely a steady cash flow generating machine which generates today a minimum of 500$ per month. Not bad as extra income…
4. Real Estate : Real estate has not been part of my game plan yet but that may change as I am currently executing the Rich Dad Real Estate Coaching Program. The key is not to overinvest in a property as I see many elderly people live in a BIG house and they can’t maintain it properly. Rental income may be an option in the future but you can also invest in REIT without owning property which I already do in my dividend portfolio.

Final words 

The government won’t raise the pension anytime soon as it would cost 2 billion to give every retiree 1500 Euro. So this game plan is useful. Pillar 1 and 2 can not be impacted a lot going forward unless I simply stop working nor stop investing in the pension fund. In my pillar 3 I definitely want to grow my dividend and options monthly income AT LEAST to the same amount as the official pension.

Today the retirement age is 67 but who knows what can change in the next 20 years. Maybe the government will change it to the age of 70. Maybe the government won’t be able to raise the pension anymore going forward and due to inflation your pension will be peanuts to support your lifestyle.

While I invest in my four pillars of my retirement plan, I consider one pillar even more important : KNOWLEDGE how to grow money ! I am currently reading the book of Dr. Russell Richards on how to trade options with an edge. Dr Russell was at the age of 68 when he started to learn about options investing. So the sooner you start, the bigger the impact of the timeframe. If you learn how to grow money, you will always have the skills to add that extra cash flow to your pension and you can afford extra travel trips or anything you want to do.

Here are the details of the book.

• ISBN-13: 978-1524538194
• Average Customer Review: 4.5 out of 5 stars   11 customer reviews

Good luck with your personal finance strategy! Thanks for following us on Twitter and Facebook and reading this blog post. As always we end with a quote.