Planning For Retirement

When it comes retirement time, you either enjoy it, or be afraid of it. Whether you enjoy retirement or not depends on the preparation you make during the years before you retire.

It is important to plan for retirement because retirement expenses could be higher than expected, corporate and government help could be less than expected, the returns on your investments may be lower, or inflation and taxes could eat into your investments more than you can imagine.

So, when should you begin planning for retirement? One possible guideline is the “20/20 Rule”. This simply means that if you expect to live 20 years after retirement, then start accumulating funds no later than 20 years before your retirement begins.

There are only 3 variables that can affect how much retirement fund you have at the end of the day. They are:

• Money you have to invest to build your retirement funds. The more money you can put aside into your retirement fund, the more money will be available to you when you retire.
• The time you have between now and your retirement. The longer the time you have, the longer you can put your money to work for you.
• The rate of return on your retirement investment. The higher the rate of return, the faster will your fund accumulate.

To plan for retirement you can follow the steps laid out below.

1. Establish your dreams and goals.
2. Estimate your post-retirement living expenses.
3. Decide if you can afford to retire.
4. Choose where you want to live after you retire.
5. Consider other issues such as health care and insurance.

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