All You Need To Know About Retirement Planning

30 November 2021
 Categories: , Blog

Most people make the mistake of planning for their retirement late in life. The best time to start is long before retirement to accumulate more assets before the distribution phase. This post provides critical insights into retirement planning. 

What is Retirement Planning? 

A retirement plan sets your retirement income goals, strategies, and decisions necessary to actualize the objectives. Retirement planning involves identifying income streams, understanding your expenses, and implementing savings and investment programs to guarantee income long into retirement. Notably, retirement planning is a continuous process of creating and reviewing a plan to prepare for life after your paid work ends. Thus, retirement planning goes beyond financial planning to encompass all aspects of your life. For instance, you may want to evaluate lifestyle choices such as what you will do after retirement and where you will live. As such, retirement planning requires a holistic approach.

Stages of Retirement Planning 

The priority and emphasis of retirement planning change depending on your life stage. For instance, in your early working life, retirement planning focuses on saving enough money. Then in your middle career life, you may need to set specific income and asset targets. 

The following are the three significant stages of retirement planning: 

Young Adulthood (21-35 years)

In this stage, you have more time but less money to invest. Thus, the focus should be on retirement savings. With more time to save, you will enjoy the benefits of compound interests and have more money for later investments. 

Early Midlife (36-50 years)

Typically, this stage comes with financial strain from accumulated credit with repayment obligations. For instance, you may be paying a student, mortgage, or car loan. As such, your disposable income available for savings shrinks, but it does not mean you stop saving. Usually, this is the time to invest, accumulate assets, and maximize tax-incentivized pension and insurance options. 

Late Midlife (50-65 years)

At this age, people become more conservative on their investment accounts. Also, there is hardly any time left to save. However, you are more likely to have high wages and fewer credit payment obligations after years of paying off your debts. Thus, you can use the high disposable income to catch up with your retirement contributions. Also, you can explore low-risk investments such as buying stocks in blue-chip companies and real estate properties. 

Benefits of Retirement Planning Consultancy Services 

Retirement planning is a technical and delicate process that requires the support of qualified financial consultants. You will enjoy the following benefits from retirement planning consultants:

  • Know how much you need for retirement 
  • Enhance your savings and investment options 
  • Make smarter financial and lifestyle decisions 
  • Reduce your tax burden 
  • Prepare your healthcare expenses and life insurance 
  • Leave a meaningful legacy through estate planning 

Do you want to retire on your terms? Then consider engaging a financial consultant to help you in the retirement planning process and secure your future. 

For more information on retirement planning, contact a professional near you.