The ABCs of Retirement Planning

So you’re getting on in years, and after a lifetime of endless toiling, you are looking forward to enjoying the fruits of your lifelong labor and have a nice, quiet retirement.  But there is still some work that needs to be done before you take your permanent break from working.  Planning for your retirement is quite literally as easy as A, B, C, and there are 3 main steps that you would be wise to follow in order to make sure that your retirement life is secure and prosperous. Step A stands for assessing your financial plan and budget.  Determine the amount of money that you would need for your retirement by building a budget that allows you to pay for your monthly expenditures, like food, bills, rent, and the like.  Take into consideration expenses with increasing costs, such as health care and insurance, as well as those with decreasing costs, such as occupational and educational expenses. It is essential to have a sufficient financial plan for both before and after you retire.  You might want to confirm with your employer whether it would provide you a health care coverage once you reach the age of 65, or you can consider getting private coverage.  Also take into consideration variable expenditures such as caring for elderly parents and tax liabilities on your house, as well as undervalued variable expenses such as recreational and living costs. Step B is to begin exploring other options for retirement income.  Verify the amount of your current retirement income, such as your cash savings, home equity, and pension plans.  If you are married, think of what effect this may have on your retirement budget.  Bear notice if your retirement funds are prepped for maximum returns.  Decide when to start your social security benefits. Compute your probable monthly retirement budget, basing it on your approximated income sized up against your expenditures.  Your retirement income should at least be enough to cover your basic costs of living for the rest of your life.  Should your preliminary assessment call for supplementary income, you may consider taking a part-time job during your retirement, or you may even sell your big home for more modest but comfortable quarters. Consider investing in mutual funds as early as possible because they are long-term investment vehicles that will allow you to earn more than what savings accounts can give you.  There are various types of mutual funds, and you may seek advice from a financial planner to help you decide which ones suit you best. Step C is to, simply put, consider getting life insurance.  It is the basis of a stable retirement plan, and not only does getting a life insurance policy allow you to leave your legacy for the coming generations, it also enables you to keep your loved ones protected and financially secure long after you have passed from this life.  Keep these steps in mind, and with some careful planning and a lot of patience, you can have a happy and rewarding retirement to look forward to in the future. Image Credit: http://www.oregon.gov/DAS/PEBB/2010Benefits/Retiree/PEBBRetireeInformation.shtml