How To Plan For Retirement
If you work till 58 or 60 and live till 80, you will have at least 20 years as your sunset or post-retirement life span. 20 years at a time, when your energy will be depleted, your earnings reduced as well as health on the wane. You may not be thinking about retirement planning now as you are young, but you should, as time just flies and before you know it, retirement would be knocking at your door. The wise and prudent make the time and take the effort to plan for retirement while it's still possible to do so.
Here are a few tips on how to go about planning for retirement:
A. Financial Planning: This is the single most important aspect of planning for retirement as your financial condition and health determines the state of life and lifestyle that you can expect after retirement.
i) The very first step is to calculate your retirement needs or kitty that you need to build up for a comfortable life after retirement. Take into account a reasonably plausible inflation rate when you are doing this calculation
ii) Pension Plans: Many companies offer superb pension plans that are based on your budget and risk appetite. Based on what age you are starting to invest in the pension plan, you can go with aggressive, moderately risky or low-risk pension plans that suit your requirements the best.
iii) Savings sheltered plans: The 401 (k) plans that are on offer could be of great use as you need to sign up quickly and contribute at a fast clip. Your employer would also contribute and you would be adding up to a tidy sum over time.
iv) Social Security Plans: In the US, there are social security options that could be considered where a percentage (40%) of pre-retirement earnings is paid to subscribers as part of post retirement payments.
v) Savings: Savings are the most important kitty that you can possibly have. Your savings not only earn interest, but also stand by to help you in a rainy day. There could be many unforeseen expenses that could crop up after retirement, where you may need to depend on and dip into your savings.
vi) Assets: Building a house, putting money in mutual funds and the like over your working years are al part of retirement planning when you will not have the earning power to build these important assets.
B. Health matters: Health worries dog retired folks as they live the golden years. It is better to have medical insurance cover for these years (even if the premium is high). Not having health insurance can be greatly injurious to your financial condition. Take the trouble to remain fit and fine, by exercising and continuing with it. This will help you avoid illness in your post retirement years.
C. Occupation: Many people get very discomfited by not having anything to do after retirement, suddenly. It is better to cultivate some interests and hobbies to indulge in leisurely, post retirement. Getting associated with social activities and causes like a church charity could be extremely satisfying and also keep you occupied and give you a sense of usefulness.
Here's wishing you all the best as you commence planning for retirement!
