A person may retire at any age he or she pleases. However, every country has its own pension rules and there is a set age for retirement. For most countries, the age for retirement is 65 or 60 if you wish to go on early retirement. So financial planning for retirement should be an ongoing thing over the life of our working years.
Fortunately for some people upon retirement, they are in a position to retire in comfort and enjoy their twilight years. However, the reality is that the majority of the working class people will not/can not enjoy their retirement age because of the lack of a proper pension facility. Financial planning for retirement is of utmost importance and should never be taken lightly.
Why Financial Planning for Retirement?
This is a question that I come across quite often when researching and discussing retirement planning and options. Despite the constant news coverage and public awareness of the importance of having a good pension arrangement, there are still a lot of seniors living in substandard conditions. Some are unable to financially care for themselves, others can barely meet their medical bills much less other daily expenses.
There are so many horror stories of hard working and honest people who have worked all their lives to build their country and retire without a proper pension. Right around the world, working adults are still counting on their social security payments and government pension, if they had worked with the government, to support them through their retirement. The sad fact is that it simply isn’t possible because the money isn’t enough.
Reasons for Financial Planning
Reasons for financial planning for retirement People are living longer than they have in decades past. In addition to longer lives, we are leading more active lives. Gone are the days when retirees sat at home reading newspapers and mowing the lawn every other afternoon. Today’s retirees are travelling, taking classes, learning to dance, and trying new things that they didn’t have the opportunity to experience while setting aside funds for the future and going about the business of raising their own families.
Now they are taking the time to do all these great things and these wonderful activities and pastimes require funds in order to enjoy. This is the number one reason you should begin as early as possible not only setting aside funds for your retirement but making active plans on methods by which you can invest those funds in order to maximize the potential of limited funds. So even if you have already hit the big 50 there is still time to start putting things in place if you have not yet done so. This is the time that it is best to take your plans, goals, and concerns to a financial planner and see what advice he or she can give you on setting specific goals, better defining your plans, and making the most of your investment means while establishing a realistic investment strategy that will not leave you feeling strapped for cash month after month.
We often overlook the important role that a good financial planner and good planning play in our financial futures. The same could be said of our financial retirements. We need to take every opportunity that is available to us in order to maximize our money. A good financial advisor will know of funds and strategies that we have never heard of. It makes sense to go to an expert when it concerns our family’s future.
Why A Financial Advisor?
Many people will readily and admittedly seek the services of legal professionals, medical professionals, tax professionals, even domestic professionals but when it comes to financial planning, they rarely seek the assistance of financial professionals. Perhaps it’s the result of our grandparents’ generation and a fundamental lack of trust when it comes to sharing our financial situation with others.
It could be that this is one area where we are simply afraid to admit that we do not hold the answers? It’s money after all; we should be able to control it, where it’s going, and what it will do when it gets there right? I’m afraid the answer to that would be, “Not exactly.” The bottom line is that a good financial planner can help you navigate your way through the treacherous territory of taxes in relation to your financial planning and so much more. Most importantly, however, a good financial planner can clue you into opportunities that you may not know about or may not know enough about. It is their business to know about the many opportunities that exist to set aside and make money for you and your family.
Role of Financial Advisors
A good financial planner can help you plan for so much more than retirement. In fact, a very good financial planner can help you plan for your retirement, the college funds for your children, emergency funds for life’s little mishaps, and a little bit to put towards those special purchases we like to make along the way. They can do all the things mentioned above by assessing your current situation, your future needs, your current means, and your future goals. They will discuss spending issues that may be problematic, make suggestions, and help you come up with a realistic plan for meeting your goals.
Their work doesn’t stop there, however. They will monitor your progress and when necessary make adjustments that will help you get back on track with your financial planning. Many people feel that they are perfectly capable of doing this on their own and the truth of the matter is that some people are. The vast majority of us, however, lack the discipline, willpower, and the knowledge of investment strategies to make nearly the return on our investments that a good financial planner will yield. When planning your financial retirement and the future of your family you should keep the bottom line in mind at all times.
If a good financial planner can net you $100,000 or more in retirement funds over time, he’s well worth the price you pay for his service. Some of the best things about a financial advisor are that you won’t have to pay the sometimes high price that comes with learning from your mistakes. You will have his or her knowledge and experience working for your money rather than your own inexperience risking it. He or she can also help you with estate planning and tax guidance so that you aren’t left floundering in these matters. He or she can also help you determine your insurance needs in order to protect those you leave behind. There are many ways that a decent financial planner can help you maximize your retirement money the hardest part for you as the consumer is making the call.
Planning Your Financial Retirement
While there was once a standard age for retirement in this country and people could count on their company pension plans or retirement funds to get them through their twilight years we are finding that people are often living longer than their funds intended and that their quality of life in these years is much better than in decades past. In fact, we are seeing a growing number of retirees that are dedicated to health and good, clean, fun living. This is something almost unprecedented throughout history and yet our retirees are younger in many ways than ever before.
This is where the problem kicks in for most. If you haven’t heard, social security, which was meant to secure our golden years is in serious financial trouble. Part of the reason for this is because people are living longer than was intended when this program was invented. For this reason, we are seeing more and more young people taking their financial retirement planning into their own hands-particularly as we are witnessing more and more retirees coming out of retirement in order to put food on their tables because their retirement funds aren’t enough to make ends meet.
It’s really sad to see those that must return to work in those years where they should be watching their grandchildren playing rather than going into work day after day. If you don’t want this to be you then action needs to be taken. You cannot depend on social security for your retirement and chances are that social services will be a long forgotten thing of the past by the time we reach retirement age. There are several things you can do that will help you when it comes to setting aside and investing money for your retirement.
The earlier in life you begin socking away money for your retirement the better. This, of course, does not mean that there is no hope if you wait until later in life only that you will need to make more substantial investments and save more aggressively if you choose to wait until a later date.
One thing you should carefully consider when planning for your retirement and setting aside funds for that end is how much money you feel you will need in order to have the quality of life you hope to have upon retirement. Many people are working longer than in the past in order to prolong their investment period. It helps if you set specific goals so that you have a number to work towards. You should discuss your plans and goals with a financial advisor from the very beginning in order to get the most accurate advice that is customized for your individual needs.
Just as there are very few things in life that are one size fits all, the same holds true when it comes to planning for your financial retirement. We all have goals for our golden years. Some of these goals include jet-setting around the world while others of us seek little more than a modest existence, a garden to call our own, and a steady supply of good books to on our nightstands. There are all kinds of retirement plans and they will each require their own unique and individual means of funding.
One important thing you need to keep in mind is that while saving is great, investing is often the wiser option for increasing your funds and netting larger earnings upon which to retire. There is risk involved in investing and you need to be aware of those risks before choosing to do so, however, there are many times where the rewards far outweigh the risks that are associated with investing.
You should always discuss your retirement plans and goals with a qualified financial planner. He or she can offer advice and guidance that could make a huge impact on the scope of your retirement and your lifestyle upon retiring. Choose your planner with as much care as you choose the plan for your financial retirement and you should be in good hands.
Why is it Important to have a Plan?
The long and short answer to this question is so that you won’t end up needing a job in order to put food on your table once you’ve reached retirement age. The sad truth is that many of our retired citizens are finding themselves strapped for cash financially and barely able to make ends meet. If they are fortunate enough to have homes that are paid for, they often find the property taxes are a little more than they can handle without some sort of assistance. Medications are expensive despite government programs to keep costs down for our elderly, and then there are those who are simply living longer than their original retirement plans had accounted for. Combine all these factors with the fact that the cost of living has gone through unprecedented increases over the last two decades and you have some very real reasons to make plans for your future retirement.
It is best to begin making these plans as early as possible. It is not impossible to recover, however, if you begin the process a little later. The problem is that you will need to make some extra investments along the way in order to make up for lost time. The sooner you begin making plans for your financial retirement the healthier your retirement options will be. The best way to go about this is to define your retirement goals, make plans, and then take your goals and plans to a financial advisor and get his or her input. Investing smarter is much wiser than investing harder.
Have You Properly Planned Your Retirement
Gone are the days of the past when people went from years of labour only to go home and live a boring and meaningless lifestyle until reaching death. Today’s retirees are more active than ever. Unfortunately, those activities take the money and unless you’re planning to sit at home and wait for death you should be making plans to take care of all those things you wish you had done earlier in life once you retire.
While you are making your financial plans for retirement you should also take the time to make plans for what you will do once you retire. Do you need to join a travel club now in order to have an established membership when the time comes to actually enjoy the benefits of belonging? How about that book of the month club? Many of these clubs are great to join while you have the extra ‘disposable’ income that goes along with working and having a career. You can take the time now to build up your library. Even if you read the books now, chances are that by the time you retire you’ll enjoy the ability to read them again.
If you are retiring today you will want to make plans to go parasailing, take cruises, ride horses, and maybe learn to golf and/or knit. You do not want to spend your golden years sitting at home waiting for the inevitable end. You want to leave this world laughing about all the fun and good times you’ve had. The stereotypes associated with retirees are changing quickly as the world evolves and people are living longer than ever before.
Plan that new Chapter of your Life
When you plan your funds you also might want to take the time to have a few daydreams about the places you will go and save a page or two to write about those dreams and sharing them with your partner in life. You should also take time to find out what he or she hopes to do, where he or she hopes to go, and the things that he or she would like to see when making plans for your retirement. After all, you have shared your lives together it only makes sense that you will share the best years of your lives with one another.
There is no better input to get when it comes to your retirement than the input of your life partner. You should also take things in stages and not try to do and see everything in the first months or year of your retirement. The novelty of not going into the office each and every day will wear off quite soon. You will then find that you can only mow your lawn so many times a day without actually doing more harm than good to your grass. You’ll know every leave of every flower in your garden, and you will know the inside and outside of every book on your shelves. Don’t become a victim of boredom in your retirement as that brings on spending sprees. Find a hobby that doesn’t require a considerable investment and you will help prolong the limited funds you will have at retirement and save them for the more important things on your list of “things to do before you die”.
Money Management for Financial Retirement
Learning to manage your money while you have more disposable income is one of the greatest gifts you can give yourself when it comes to your retirement. One of the best things you can do in order to prepare yourself for living on a ‘fixed’ income that goes along with retirement is to establish a budget and spending limit each month and live within that budget. In fact, you might wish to establish a smaller budget than you actually think you will need in order to maximize the effect and add a little padding to your savings account. Over time, the little savings can either provide a nice boost to your retirement fund or a great night on the town as an occasional treat.
Living on a budget is one of the most difficult things that many Americans will ever face. As a matter of fact, we have a nasty tendency to live at the very edge of our abilities and overextend ourselves heartily. A good method for learning to create and establish a budget is to make a list of all your monthly spending right down to your miscellaneous expenses and convenience store and break room snacks and stops. Then add up the totals and see where you believe you can cut costs. Of course, it isn’t enough merely to say you want to cut costs in certain areas, you need to create a plan of action for doing so.
If you are creating greater costs by having an afternoon coffee or snack at work see if you can bring them from home in order to cut costs. Cook one extra casserole per week and freeze it in order to eliminate those last minute fast food run when you simply don’t feel like cooking. Take baby steps when it comes to cutting costs and over time you will find that you have learned to live with even less than you thought possible. In fact, you can make it fun by making it a challenge. See who can eliminate the most money from the budget each week and actually stick to it.
The thing you do not want to do is deprive yourself to the point that you will eventually go out and undo all the good by splurging. You need to reward yourself along the way for the small steps you have taken. Set goals for saving as well as your budget and you will find that you are much better prepared to budget your money you are confined within that budget. While you were at it, you just might find that you’ve saved enough to increase your investments enough to bump your budget a good bit when the proper time comes.
You do not have to have an all or nothing approach when you begin learning to manage your money, especially if you are making the effort before you reach the point of retirement. Little things we do on a daily basis that help us make more responsible decisions about our money will become habits over time. Those habits will serve you well throughout life and retirement. They will also help you prioritize your spending once you are living with limited means in order to decide what you can and cannot sacrifice in order to get the most out of life.
Final Notes for Financial Retirement
When it comes to investing, whether you are putting aside money in order to send your children to college or aggressively saving for your eventual retirement there are many things you should keep in mind when making your investments. Keeping these things in mind will help you take the successes and losses you experience along the way in stride. This is important as we must keep going and investing if we want to build a solid retirement for ourselves or education for our children. If we give up and decide to play it safe we are seriously limiting our potential. You must learn from your mistakes and work hard not to repeat them rather than letting them rule your future investments.
The first and most important rule to remember is that there are no absolutes. There is no absolute right or wrong method of investing just as there is no one right or wrong way to save your money. There are only the methods that you are more or less comfortable with. The good news is that while diversity is the key to building a strong portfolio, there are many options from which to choose in order to keep your portfolio diverse and, more importantly, profitable.
For today’s investor, there are all kinds of venues to pursue. You have the choice of stocks, bonds, mutual funds, property investing, and many categories of each of these in between. You should seek the services of a financial planner in order to help you get through those areas that are confusing to you or those that make you uncomfortable. If you are still uncomfortable with certain types of investing after speaking with a planner there is no specific reason that you must pursue any one course of investing over another. It is often the wiser course of action but not necessarily the correct course of action for you as you are likely to make mistakes out of nervousness rather than allowing the fund to do their job and make money for you.
You should also never invest in companies, bonds, funds, etc for any reason other than you feel they will provide a good return on your investment or you really want to support that particular company. Do not be pressured into making an investment decision that you are not comfortable with unless you are having a hard time risking your money at all. In order to get the returns, you will need to provide a proper retirement you will need to take some risks. The greater the risks the greater the potential rewards.
Whether or not you realize it, the choices you make when it comes to your investments affect every aspect of your future retirement or your child’s education. You cannot afford to risk those important things too terribly long by being paralyzed by your fear. Fear and anxiety are quite common emotions to experience when handling funds that will have such a profound effect on your future and that of your family. This is a time when a financial advisor or planner is an excellent idea as he or she can take over the reins within reason of course, during these times and pick things up and get them moving in the right direction once again.
There will be setbacks along the way when you are investing in funds. I do not personally know anyone who has never lost any money in the stock market. I also know that when you lose money even 50 cents can seem like a tragedy if you allow it to. You must see the bigger picture rather than hyper-focusing on one good or bad decision.
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