Retirement Planning: Everything You Need To Know
Ah, retirement planning – nothing sounds as sweet in the middle of a hectic workweek, as you try to juggle three meetings, return seven calls, write a brief, and get home in time for dinner all at the same time.
At those times, retirement seems very far away, like a promised land you’re bound to reach if you’re just patient enough. But in reality, you need to create your own paradise for yourself.
To that end, let’s answer some of the more prominent questions about retirement planning. Don’t forget how important having all of your insurance policies is before and after you retire.
When Do I Need To Start Thinking About Retirement Planning?
The sooner the better is short and sweet of it.
Most of us will need to spend around 30 years of our lives working before we can retire (some more, others less), and that may seem like a long time. But, if you start retirement planning early, you can generate more money than if you only start thinking about it five short years beforehand.
How Much Money Do I Need To Retire?
This is by far the most important question, and also the most difficult to answer.
The answer will depend on a multitude of factors, like the age you would like to retire at, your current income and your expected income for years to come, the kind of lifestyle you want to have when you retire, where you want to live after retirement, and so on.
There are those who choose to retire on very little, while others plan on having a lot more money in the bank and eliminating all possible worry. In fact, you can plan to lead a much more extravagant lifestyle once you stop working as well.
Here’s what you should write down:
What Do I Want To Do When I Retire?
While you might not have a clear idea right now, think about a general direction you want your later life to take. Also, if you are now in a position where you can help your parents retire, if they are in that stage of their lives, consider what they’re faced with and how you would want to handle the same situations.
How Much Money Do I Need For That?
This is the most important part and the one that will be difficult to come up with. Always assume you will need more than you think, just to be on the safe side.
How Much Money Do I Have Right Now?
Another excellent point to consider – when you have a general figure in mind you want to reach, see how much of that you already have (that is also dedicated to retirement, rather than buying a new car). This will tell you how long there is to go.
What Are My Options?
There are all kinds of retirement funds you can choose to invest in, including the 401(k), a traditional IRA, a Roth IRA, a 403(b), and so on.
Before you make your choice, make sure you read all the fine print and that you’re absolutely clear on what’s required of you and what you will need to do, as well as how much money you can expect to have access to in the future.
Of course, you can go the less traditional route and invest in bonds, real estate, or other valuables, and look forward to a return on investment in the future.
What Is The Best Option?
Sadly, we can’t answer this question for you, as it will wholly depend on your personal circumstances.
Think about where you are now and where you want to be in retirement. For example, if you’re currently working a part-time job, you may not be able to afford that retirement condo unless you start earning more.
Remember that the sooner you start, the better your options will be, and once you select the type of retirement fund, don’t just leave it as is. Keep your eyes open for different options, rethink your milestones, and don’t forget that although retirement may seem a long way away, it will arrive much sooner than you’d think.
The key to retirement planning is to work hard today so that your future self can thank you at a later date. Don’t be afraid to look into all kinds of options and explore a variety of solutions before you select the one that works best in your particular situation.