Retirement savings v Emergency fund in uncertain economic times.

This article first appeared here.

Which should be the priority in uncertain economic times? Retirement savings or emergency fund?

When you’re nearing your retirement and you’re working and living on a tight budget in uncertain economic times, when future economic environment is unpredictable, it’s always going to be difficult to know which to prioritize between retirement savings and emergency fund.

The reality of life is, both are necessary.

It is necessary to set aside a stash of money to take care of income and spending upsets.

No one prays for a job loss but it can’t be ruled out in uncertain economic times.

And in life, no one prays for unwanted expenses like a medical emergency, but it still happens.

So, an emergency fund is necessary.

The regular contribution to retirement savings is also necessary.

Why is it necessary?

70 years is the age of retirement from active service.

You’re expected to bow out of active service when you clock 70 and depend on your retirement savings as your major source of income.

So since both are necessary to help reduce financial stress and avoid interruption to a lifestyle you are used to, you need to strike a balance.

How can this balance be achieved?

By working out a ratio that allows you to contribute regularly to reach the maximum level of your retirement savings and also have a cash reserve that’d cover at least, one year expenses on basic needs.

This is a conservative approach.

You may decide to have a balance that suits your personal preference and career field.

Comments

15 Surprising Benefits of Journaling (and How to Start).

Benefits of Journaling. This article was first published on Ayi Post. What Is Journaling? Journaling is the simple yet powerful act of writing down your thoughts, feelings, experiences, and ideas, usually in a private notebook, app, or document. You can approach it in a structured way (like using daily prompts) or completely free-form (writing whatever comes to mind). Some people use journaling to reflect on their day, plan goals, vent emotions, spark creativity, or even track habits and dreams. At its core, journaling is like having a deep, honest conversation with yourself, providing a safe space to explore what’s happening inside your head and heart. (Tip: There are tons of journaling styles you can try based on your goals! Scroll down for examples.) Famous People Who Swear by Journaling. Many successful people use journaling as part of their self-care and success routines. Here are a few notable examples: 1. Oprah Winfrey: Credits gratitude journaling for her happ...

9 High yield savings accounts in Nigeria.

High yield savings account in Nigeria Here are nine Nigerian banks known for offering high-yield savings accounts, as of the latest available data. The interest rates can vary, so it’s always a good idea to check with the banks directly for the most up-to-date offers. 1. GTBank (Guaranty Trust Bank) Known for competitive interest rates on savings accounts, including specialized savings products like the GTSave savings account. The GTSave offers a competitive interest rates at 8.175%. 2. Access Bank Offers a variety of savings products with attractive interest rates, especially on their Access Bank High Interest Savings account. Access bank premier savings accounts attracts interest rate of 8.175%p.a paid monthly. 3. Zenith Bank Provides various savings products with good returns, including the Zenith Bank High Yield Savings account. Zenith bank has an account called Save4Me. Save4Me is a savings account with a higher interes...

Naira Redesign, Withdrawal Limits And Credit Worthiness of Nigerians.

Currency redesign by the Central Bank of Nigeria and its complementary withdrawal limits have come to stay. The recent news from the Central Bank of Nigeria (CBN) is an indication of the near irreversibility of the policy implementation. The news claimed that volume of currency in circulation, not in vaults of banks has dropped by at least 5 percent in just one month. So withdrawal limits are going to be enforced to the letter but Nigerians may not have the luxury of time (Senate is urging CBN to set June 30, 2023 as the new deadline). In the event of no deadline extension beyond January 31st, 2023, how're Nigerians going to make urgent purchases above weekly withdrawal limits? Or even make long term arrangements? Financial transactions are often done on two bases, cash and credit. In many economies, where individuals take their creditworthiness serious, most financial transactions are done on credit basis. In Nigeria, it's mostly on cash basis and soon, this is no longer g...

Finance

Search This Blog