How To Plan For A Secure Retirement ?

Many people think that social security and work pension is all that is required for a happy retirement. However, others realize that they need more than that. There are many products available by investing in which you can reap benefits for future but it is necessary to understand the basics about retirement planning first before thinking about any kind of investment.

How Much Money Will You Need for Retirement ?

The first step is to figure out how much money is required actually. If you know how to calculate the right number, you can get a total using one of the online calculators. The figure is unique to each person based on several factors. You need to sit down and jot down the answers so that you can know how much money you will require for living expenses after resigning from work.

Below is the list of some basic questions that you need to figure out:

When do you want to retire?

Many people want to retire as soon as possible for social security. Conversely, others plan to work longer, alongside others hope to retire early to enjoy their later years. Whenever you plan to retire, it has a direct impact on the funds you require for retirement planning.

What alternative sources of income do you expect in retirement ?

You may be expecting social security benefits and other pension plans. There may be also retirement benefits from the workplace itself when you retire. This money will eventually lessen the amount required to put into your savings plan.

How much have you saved already for retirement ?

If you are earning handsome money and have been saving for several years, then you may have already enough funds for your retirement age and you will need to invest.

How much will you withdraw after retirement from savings?

Some people save enough money in their early age that they can live off of the interest along with their social security after retirement while others may need to use a part of the principle savings amount each year.

How will deal with paying for your care as you age?

You have to figure our long term insurance premiums in advance because later on they will cover of your care cost when you will need assistance. Else you will have to pay extra for assisted-living facility or in-home companion as you begin to require more care.

What is the expected growth rate of your money?

You may need a financial advisor to answer this question. He/she can advise you that the money you invest earlier has a greater chance of earning you a higher percentage of return later. Of course, it may also have higher risk, which is why people should select safer investment options with a help of talented financial advisor.

Once you got an estimated figure if money required, next you need to learn about the types of retirement plans you can choose from. There are basically two options: either hire a financial planner or plan the investment yourself. Both the options have individual benefits.

Nevertheless, the role of financial advisors could be never replaced by any other option. They work to maximize consumer’s profits and suggest the best investment strategy according to retirement age and goals because they thoroughly understand the basics about investing.