Why and how can I create capital for my retirement?

To enjoy the most relaxing retirement possible it's essential to prepare well in advance, particularly from a financial point of view. How much do you need for a comfortable retirement? It all depends on your plans and lifestyle, but in this article we would like to present several options for investing to top off your retirement.

Changes to the retirement age: what's in it for you?

Unfortunately, it is often in the news that the retirement age has to go up again. Currently, in 2023, the eligible retirement age stands at 66 years and 10 months.

In 2024, this will be further increased to 67. After that, the retirement age may not be raised again until 2028.

This increase can significantly affect both the timing of your retirement and the amount of your pension, making it more important than ever to prepare properly for retirement.

How can you prepare financially for your retirement?

One of the best ways to prepare for a comfortable retirement is to maintain diversified sources of income, even after the end of your career. Depending on your job, you may already have access to one or more retirement supplement schemes. For example, if you are a public sector or education employee, you contribute to the ABP (Algemeen Burgerlijk Pensioenfonds), the largest pension fund in the Netherlands. Since April 1, 2019, employees who do not yet build up any or little additional pension through their employer can set aside a piece of their own salary for later. You can do so through the VAPW (‘Vrij Aanvullend Pensioen voor Werknemers’). Supplementing your pension by means of individual (retirement) investment accounts is of course also possible, such as, for example, the securities account of our Scalable Broker.

What's the difference between investing and saving for retirement?

The main difference between savings and investment is their different timeframes.

Savings are short-term investments that are used to store liquid assets for a range of situations, both planned and unplanned (a trip, a major purchase, renovations, etc.). The advantage of savings is the easy access to funds. If your savings are in a current account, for example, you can get your money back at any time, without any fees or loss of value. With a long-term vision, however, savings will on average offer a lower return than investment.

The investment is intended to prepare for major expenditure in the longer term, such as a property purchase. Retirement is one of the long-term prospects for which investing makes sense. By defining an investment plan and feeding it over an extended period of time, your capital can be multiplied significantly. But remember: only invest money you know you won't need in the short term! Indeed, although it is always possible to withdraw your invested money, fees may be associated with this withdrawal, and a loss of capital linked to the state of the market is also possible.

Is it too late to start investing for your retirement at 35?

It's never too late to start investing! And, whatever your age, it's up to you to define an investment plan that suits your needs. Ask yourself: how much do you think you need for a comfortable retirement? And what resources do you have at your disposal? Perhaps you've just come into some unexpected money, which could provide a good basis for investing. You can also decide to convert part of your income or savings into an investment that can be used to top off your retirement when the time comes.

Want to start investing today? Discover Scalable Broker and take control of your financial future in just a few clicks.