IMPORTANCE OF SAVING FOR RETIREMENT

All too often people entering retirement do not place enough emphasis on personal planning to ensure they maximize their opportunities. So take the time now — at an early stage in your planning process — to think about the choices you have about how you would like to spend your time during retirement.

People’s retirement needs vary greatly, but everyone will have basic expenditures: home maintenance or rent, transportation, medical care and living expenses. Many Americans hope to be able to travel, golf, eat out and make big-ticket purchases during retirement.

Importance of Planning for Retirement

There are two components to retirement income planning: Personal Planning and Financial Planning. Personal planning is important because it is the determining factor of your satisfaction with your retirement lifestyle.

Financial planning is crucial because it identifies your sources of income and expenses and establishes your retirement budget, based on your personal plan.

Personal Planning

All too often people entering retirement do not place enough emphasis on personal planning to ensure they maximize their opportunities. So take the time now — at an early stage in your planning process — to think about the choices you have about how you would like to spend your time during retirement.

Do you want to volunteer at a local hospital? Take up that hobby you were always interested in, but never had the time to start? Go back to school and pick up a few special interest courses? Start your own business? Travel around the world? Buy property in a warmer climate and spend the winter months there?

These, and many other lifestyle questions based on your preferences, are all important factors to consider when planning your retirement since your choices will drive the financial circumstances that must be meet in order to achieve your goals.

Financial Planning

Will you have adequate funds to provide the kind of retirement lifestyle you envision? Remember your income will likely come from three general sources: government pensions, employment-related sources and your own personal investments.

Your retirement will be more enjoyable if your income is structured to fit your lifestyle choices and if you have developed a retirement plan to protect the assets you have worked hard to acquire.

Follow these foolproof steps to retirement income planning:

  1. Identify & compare your income and expenses to determine any shortfalls or surpluses.
  2. Review & analyze the various retirement income strategies.
  3. Review & compare the retirement income options available.
  4. Develop an action plan.

 

Here are some dos for your retirement planning:

  1.  Regularly review (two to four times per year) the performance and management of all your plan investment options.
  2. Pay special attention to new funds added to your plan.
  3. Re-adjust your portfolio so your investment allocations match your desired level of risk.
  4. Match up your current and future contribution percentages.
  5. Take the time to educate yourself about how to invest for retirement.

Author: Louise Fitchard

Louise is Agenda’s resident fashion & lifestyle expert. She also covers topics relating to entertainment & travel. Out of work, you can find Louise at the cinema, reading romantic novels or buying (another) pair of heels for her next trip abroad.

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