Just how do you plan to live after the productive years have ended? This is a question most of us are afraid to confront, some of us are in continuous denial terribly afraid to face the fact that we won’t be working and earning an income forever.
Have you ever stopped to think where the money will come from or better yet what type of life you will be able to live at retirement. Well if you have not yet done so stop now take a few minutes to think about it. So now that you realize move with alacrity to get your retirement plan in place. This is simply a savings and investment plan that allows you to accumulate wealth during the productive years with the objective of providing income at retirement. While there are many and varied retirement options pension plans are usually the most common with their significant tax benefits making them very attractive. The pension options locally are Superannuation and individual retirement schemes (IRS).
Choosing a retirement plan is one of the most important decisions you will ever need to make, you therefore need to be prudent and plan wisely. When setting up this plan there are a number of things to consider in order to ensure that you create the best possible retirement option based on your needs and affordability. In doing this, like withy many other plans you might want to create a check list of questions that if and when answered would help you to put together a retirement plan that is tailor made for you.
Some items to consider for this checklist are:
- What are my current earnings?
- What are my current expenditures?
- What if any is my surplus?
- What can I afford to put away?
- What expenditures can I do without?
- What is my net worth
- What kind of life style do I wish to lead at retirement?
- How early will I retire?
- Hence how much time do I have?
- How much money do I need to survive at retirement?
- Will my pension be enough?
- Will I need supplemental income?
In examining this list of questions it then becomes very clear that you will need to do a budget. This budget will not only look at your current situation but should also include a forecast of what you will likely need to have available for retirement income. It has been said by many experts that a person needs at least two thirds of the average of the last five years income to survive comfortably. With this in mind you can therefore make calculated guestimates of what this will be and therefore work out how much you will need to save to get there, you could also look at the kind of returns your retirement investments need to be generating, this will certainly help in choosing your fund manager if you are not in a superannuation fund. It could also help you to gauge whether your pension will be enough or whether you need to have a supplementary retirement plan.
In addition to the above the checklist of questions will help you to assess whether what you can begin to save now will be enough or whether you will need to adjust your contributions as your situation changes. The fact of the matter is that these things are not cast in stone, and therefore require consistent monitoring and review to determine whether you are on the right track.
Retirement (as long as we live long enough) is a must, we therefore cannot afford to act as if it is something that will take care of itself. We must act to ensure that our retirement is something we can look forward to with the joy in knowing that we are properly prepared. Let us take the time to do the assessment, make our checklist as our guide to setting a proper financial plan. Having set that plan do not hesitate to implement it. Once it is implemented we must constantly and consistently analyze and review it . where it is found wanting revisit your checklist to see where the failings are and do not be afraid to make the necessary adjustments to ensure that your goal of a financially secure retirement is achieved.
On completion of your retirement planning checklist, it should become clearer what is required now in order to realize your retirement needs, and the opportunities you should examine in preparation for a practical lifestyle after you retire.