Why you need to plan for your retirement

As posted on Stuff February 2025 by Katie Wesney a financial adviser at enable.me

“There are key actions you can take that are in your control to prepare for foul economic weather. It’s never too late to begin but you do get a head start if you act when the sun is shining (or even overcast).
Build resilienceFinancial resilience is represented by the ability to hold your line when the economic clouds gather. A decline in the paper value of your home only becomes a real loss if you are forced to sell when the market is lower. There are endless economic cycles, and you should prepare for values to dip. That’s why you need a buffer - best practice is to have one equal to 6 months of expenditure. That might be in savings, but it could equally be a line of credit at the bank.
Consider insuring yourself, not just your thingsHouse, contents and car insurance are non-negotiable, but your biggest asset is your ability to earn income. Consider protecting your income through either income protection or disability insurance to replace a portion of income if you’re unable to work due to illness or injury. Likewise, health insurance can protect against the financial burden of medical expenses - check if your work has an affiliated provider. Yes, it’s a cost, but invaluable when things go wrong. Review your policies regularly to ensure they are fit for purpose.
Keep investing in yourselfDo the course, start the side hustle or side business, do freelance work. Maintaining job security and continuously upgrading your skills increases your resilience. Being adaptable and having a diverse skillset can help you pivot if necessary.
Tackle debt head onIf you have short term debt, your first step is to accelerate getting this gone. This will decrease your fixed cost load and give you greater ability to build a buffer. Like anything, moderation is key. I’ve seen people go too hard throwing everything they have at high interest debt but leaving nothing in the coffers for when the car inevitably blows up. Then the cycle perpetuates as you pull out the credit card to pay for the thing.
Get serious about your mortgageGood mortgage management is the cornerstone of any financial plan. If you can pay it down faster, please do so. Often the mortgages is your biggest cost, so once it’s gone, that’s a whole lot more money you have left over to save or invest - or not have to cover if income is suddenly reduced. Plus reducing the debt on your home reduces the chances of ending up in a negative equity situation if you did have to sell during a depressed market.
Adapt don’t just reactYou must proactively assess your spending habits and cut out non-essential expenses, especially in uncertain times. Ultimately, protecting yourself from financial shocks isn’t just about reacting to crises – it’s about preparing for them, proactively.”
Learn how to implement these and additional simple money management concepts now to ensure you have a long and prosperous retirement. 
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