The Brexit vote reverberated loudly across Britain. We are still dealing with the aftermath of the shock of it all. Everyone was affected in some way but it seems none were more immediately affected by Brexit than those who have already retired.
Declining value in savings
As part of their savings strategy, many retirees had IRAs (Individual Retirement Accounts) and savings in the pound. Post-Brexit, they have seen their portfolios decrease in value when the pound fell after the Brexit vote. The decline in the value of the pound has largely levelled off at the moment, but the overall value of the currency has not rebounded. The consequence of this is many retirees holding IRAs that will likely not see growth for quite some time.
What if you’re behind on your retirement savings? How can you catch up in the shadow of Brexit when your time is getting short? Don’t despair: there are steps you can take to get your retirement back on track.
Protect what you have
No one can say for certain what Britain’s economic future will look like. No government exit plan has yet been unveiled. Those who have already retired or have begun a savings portfolio need to first take steps to protect the investments they have. The best way to do that is to diversify your portfolio. This includes investments in economies outside of Britain.
Increase your savings
You’ll need to put aside as much as you can if you’ve gotten behind on your retirement savings. You can calculate how much you can expect from your state pension and how much you’ll need to spend each year to maintain the lifestyle you want.
Once you have your figures in hand, look at how much you’re saving each month, then find a way to increase it by as much as you possibly can.
If your employer offers a pension plan, increase your contributions each month. If it is a plan that includes employer matching contributions, you need to put as much as possible into this fund.
Clear your debts
It is just common sense that your money will go further if you don’t have a pile of debts to pay on each month. One way to help catch up if you’re behind on your retirement savings is to pay off your debts as quickly as possible, then take the funds you would normally pay out to debts and add them to your retirement savings.
Downsizing can help
One strategy many people use is to plan to include the value of their homes as part of their retirement. Take a critical look at your home. Do you really need that much space in retirement? If not, consider selling it. Or converting all or part of it into rental property. Renting will give you an additional income in retirement.
With the final stages of Brexit still on the horizon and the continued uncertainty of the repercussions of that historic vote, the best course of action for the people of Britain is simple: don’t panic. Guard your savings through diversifying your portfolio. The rest of the best advice falls along a simple line of reasoning: use some common sense measures and you can weather this Brexit storm.
Midlife mum from Cardiff. Wine Imbiber. Likes glitter, fluff and olives. Approaching tweendom with Caitlin (11) and Ieuan (10). The husband is hiding in the loft.
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