Retirement does not always turn out the way people think it should because many people live in denial that the future is automatically secured. While some are still trying to figure out what they need to do to retire comfortably and it sometimes takes a long time for others to align with their new state of life; which may be altered by the death of a spouse, mortgage payment, change in eating habits, change in living condition, education for grandchildren and a whole lot more.
Retirement planning starts with thinking about your retirement goals and how long you have to meet them. Never push planning for retirement to a later date.
Start planning for retirement as soon as you can to take advantage of the power of compounding interest. Younger investors can take more risk with their investments, while investors closer to retirement should be more conservative.
In general, the older you get, the more your portfolio should be focused on income and the preservation of your money. At this stage, you should be investing in less risky investments which may give you less proceed or dividends but will be less volatile and provide income that you can use to live on and less concern about inflation. A 60-year-old who is planning on retiring next year does not have the same issues about a rise in the cost of living as a much younger professional who has just started working.
You may also need more money than you think if you want to purchase a home or fund your children’s education post-retirement. This outlay has to be factored into the overall retirement plan. Always try to update your plan once a year to make sure that you are keeping on track with your savings.
Retirement planning accuracy can be improved by specifying and estimating early retirement activities, accounting for unexpected expenses in middle retirement, and forecasting other costs like medical costs. Health insurance is also key for old age, as one grows old. This will take care of unforeseen ailments that may come up at old age. You don›t need to add financial stress to health challenges.
Learn quickly about your investment time horizon. If you are above 50, that means your time horizon will be lower than someone who is less than 50. If you fully understand this, you can then make your investment goals around it and make a workable plan.
Let me show you how to calculate your Investment Time Horizon. On one side, place your age as of today; on the opposite end, identify your target age when you hope to achieve your most distant investing goal: (for many people, this is retirement). The intervening years between these two ages is the time horizon you have for that future target.
In simple terms, investment time horizon means the time one has left to save or invest before one retires or dies. If you›re over 50 and you have not started planning to retire wealthy, then you need to start now.
As the saying goes, when you wake up is your morning. Remember this is your journey, not anyone else. There are things you should keep in mind.
Don’t compare yourself with anyone. Start planning now and don’t procrastinate.
Give yourself a TARGET and make sure it is a S.M.A.R.T. target. This means your target should be Simple, Measurable, Achievable, Relevant, and Time-bound. Because you think your time is far spent, there is that tendency for you to feel under pressure to make up for the lost time. Please don›t fall into that pressure trap.
Get a personal financial advisor who can help you at this stage and work with you for the first 6 months and focus on building a savings and investment portfolio for you at your pace. Once you get it right, it will be a walkover for you.
While you plan, remember that you will need more money in retirement than usual. Certain financial institutions cater to golden age customers and give them access to more interesting investment opportunities, that you can take advantage of at this time.
In a country like ours, some grandchildren are still being taken care of by grandparents who are already retired. This can be a pressure point in retirement. It will save everyone the hassles of education costs if all of this has been planned for ahead of time.
Retirement can be a lot more fun if there is a lot of money to spend. Though you don’t need to amass huge funds to retire comfortably, careful planning can leave you with enough money to enjoy your retirement years in peace.
All it takes is consistent learning, regular savings (set up an automatic savings deduction) automatic deductions create a commitment to your financial future that helps you remember to save regularly. If you are serious about retirement, this is a fantastic step to give you some of the money you may need to spend or invest.
Feel free to send me an email if you need further advice as you plan for your retirement.
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