Many of the people , I speak say, that they do want to retire “the sooner, the better”, but they have not prepared themselves for that D-day. They wonder what planning or preparation is required for retirement? They feel and hope that they would be able to sustain a comfortable life ,even after retirement,without any per-planning. Even some think ,they would never retire and the life will always be like this. BUT this is not going to happen. That D-day is going to come, sooner or later, whether you like or not. Especially at the age of 50 or 55 years, one should not close eyes to the reality of life and can’t brush aside this fact. One has to plan and prepare for impending Retirement life.
Retirement, which seems to imply idleness or the end of usefulness to society, may not be a proper term for many, who wish to remain active. So, the correct term, in my view ,should be Superannuation, i.e. having financial flexibility and independence, and not having to work for a job.
Why To Prepare For Retirement?
If you hope to someday reduce the time you spend working or cease working altogether, you’ll need sufficient savings to support yourself. Many people underestimate the amount of money needed to retire. You can live with this absurd thinking at your young age of 30- 35 years, but at your advanced age of 50- 55 years, you have to figure out how much you should save per month to achieve your retirement goals. This period in your career when you are hardly a decade away from your retirement, is a critical period in which you should have a realistic assessment of how financially prepared you are for retirement. There are so many variables to consider when planning retirement that if you forget a major piece like- healthcare costs, nursing home care, loss of good- paying job etc., your retirement plans could drastically be affected.
Don’t Neglect Non-financial Preparations For Retirement : –
Investing your money/ savings is just one aspect of preparing for your retirement. In order to enjoy the lifestyles, even after retirement, you needs to invest energy into other areas of your life as well.
—– Physical Health : – Few things are more important than your health. Unfortunately, many people aren’t motivated to care about their health until they discover problems. By then, it may be too late. Exercising regularly, eating a balanced, and nutritious diet, driving safely go a long way in this regard. Regular medical exams. Are also important in detecting problems early.
— Psychological Health : – In addition to your physical health, be sure to invest in your psychological health. Have a circle of family and friends around for support. Unfortunately, many people become more isolated and lose regular contact with business associates, friends and family members as they grow older. But to have a happier and healthier life, try to stay active, getting involved in volunteer and new social circles.
— Stay Active –: – treat retirement life like a bubbly, charming period. To avoid boredom and depression, you need to have a sense of purpose and a sense of routine. Establishing hobbies, volunteer work or a sideline business can be a terrific way to ease into retirement.
Financial Planning For Your Retirement : –
To maintain your standard of living in retirement, you may need about : –
— 65 percent of your Pre- retirement income, if you :
— Save a larger amount(15 percent or more)of your annual earnings.
— Are a high income earner.
— Will own your home free of debt by the time you retire.
— Do not anticipate leading a lifestyle in retirement that reflects your
current high income.
—– 75 percent of your Pre-retirement income, if you : –
— Save a reasonable amount(10 to 14 %) of your annual earning.
— Will still have some mortgage debt or a modest rent to pay.
— Anticipate having a standard of living in retirement that’s
Comparable to what you have today.
— 85 percent of your Pre-retirement income, if you :
— save little or none of your annual earnings(less than 5 percent)
— Will have relatively significant mortgage payment to pay in
retirement.
— Anticipate to maintain your current lifestyle through retirement.
Some Basic Steps To Help You Through Retirement : –
- Plan Both Financially And Personally : – Planning your activities is even more important than planning financially. Plan your interests, friends, and ability to know how to spend money when you retire
- Take Stock Of Your Resources : – Ignorance about your assets may cause you misunderstand how little or how much you really have for retirement when compared to what you need..(In this regard, the above data of financial planning may help)
- Reevaluate Your Insurance Needs : – When you have sufficient assets to retire, you don’t need to retain insurance to protect your employment income any longer. Similarly. You can reassess your Life insurance and other Insurance coverage,
- Evaluate Health care/ Living Options : – Medical expenses in your retirement years can be extremely high. Early preparation , in this regard ,increases your options; if you wait until you have major health problems. It may be too late to choose specific paths
- Decide What To Do With Your Retirement Plan Money : – If you have money in a retirement savings plan, you have option of leaving the money in the plan. Further, you have many more (perhaps better) investment choices to consider. Evaluate your options properly.
- Pick A Pension Option : – Selecting a pension option is similar to choosing a good investment- each pension option carries different risks, benefits, and tax consequences. Check to see whether the amount of your monthly pension stops increasing past a certain age. Then don’t delay access to your pension benefits past that age.
- Get Your Estate In Order : – When you’re considering retirement or you’re already retired, getting your estate in order makes all the more sense. Plan your estate/ ill properly. You may also want to consider giving monetary gifts now, if, you have more than you need.
CONCLUSION : –
Retiring can be a challanging transition. Most Americans have an idealized vision of how wonderful retirement would be- no pressure of work, deadlines, irritating bosses, unlimited time to travel. Play and lead a good life. Sounds goods, but the reality for most Americans is different, especially for those who don’t plan ahead(financially or otherwise)
BUT before it is too late, as it may already be at the age of 50- 55 years, assess your financial readiness to determine whether you have sufficient resources to met your retirement goals and objectives. To help you in this regard, it is best to seek professional help from those who specialize in retirement planning.