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Your life goals are as individual as you are. Financial advice is not an end in itself: it is a means to help you achieve your goals while protecting you on the journey.

Saving – Don’t Put Off Till Tomorrow What You Can Do Today - Article Published 23rd May 2013

To read the Article Published in The Portugal News Online by Raoul Ruiz Martinez please click here

Sadly, at the end of a working week or working month, many of us have very little surplus to put away for retirement and, in some cases, accounts are often in the red.

The impending reality is that the financial advantages and benefits from the state are in reverse. Lawmakers are trying to influence the public to assume more responsibility on private finance rather than a dependence on a state support.

Saving is big news so today we need to focus on making the necessary arrangements to secure an income in the future without having to work for the rest of our living days.

For most the accumulation of wealth is essentially a long term savings plan and the accumulation phase will differ from person to person, depending on their understanding of investment risk and also how long they have to retirement. To evaluate the amount you will need to achieve a sustainable income in retirement means that you must work backwards from a specific retirement date or age. This, of course, will be influenced by your attitude to saving, your age today and bridging the gap between your income and daily expenditure.

For most young people in their 20’s, this subject couldn’t be further from their minds, and with youth unemployment averaging between 25%-50%, these conditions do not provide our younger generations with a conducive environment to even contemplate a beginning.

In these instances, parents or grandparents may be able to put aside a small sum on a regular basis to build up and to be acquired at a later date. This can eventually provides a source of wealth to secure an income later on in life, or even provide a lump sum towards a deposit for a first home purchase.

For those in their 40’s, their outgoings will involve a greater deal of responsibility and commitment than during the earlier stage of life. The reality is that if you have not been saving since your 20’s on a regular basis, you will need to start as soon as possible, and at much higher levels than if you had started earlier.

This is one of the unfortunate paradoxes of life in that most are borne into life without a large single pot of cash that can be spent until we draw our last breath.

For an individual of 40 years of age who wishes to retire in 25 years time at 65 will need to save, at the very least, 300 euros every month.

Maintaining this level of contributions has the potential to provide a pot of wealth of about 230,000 euros when saved over a 25 year period with an annual net return (after all costs, taxation, etc.) of 5% and an indicative inflation rate of 2.5% every year. Eventually, when you reach retirement, this amount of capital may well be able to purchase a secure income for life such as an annuity. If annuity rates or bank interest rates were at 5% (today annuity rates are at around 3%) this would provide you with an income of 11,500 euros a year which is just under 1,000 euros per month.

So is it too early or is it too late to save?

To answer that question, and using the same factors highlighted above, a 20 year-old would need to put as little as 75 euros a month away.

At the other end of the scale, a 45 year-old would need to save about 450 euros a month, a 50 year-old 750 euros whilst a 55 year-old would have to save in excess of 1,300 euros a month.

Saving is often considered as something we will do “tomorrow” but the reality is that that by it’s very nature, to prepare for tomorrow it has to be done today.

This article is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investments or course of action.

Raoul Ruiz Martinez is a resident and independent consultant for Finesco Financial Services Ltd., Glasgow and advises private clients on financial investments in both the UK and throughout Europe under MiFID regulation. He can be contacted at the offices of euro FINESCOs.a. either by telephone on 289 561 333 or email Raoul.Ruiz@Finesco.com.

Finesco Financial Services Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Some of the services provided are not regulated by the FCA because they are not included within the Financial Services and Markets Act 2000.

Raoul also has regular radio appearances with “Raoul’s Rant” on the Owen Gee Solid Gold Sunday show and the “Money Minute” on the Kiss FM Breakfast show from Tuesday to Thursday between 11 and 12