Saturday, June 30, 2018

Plan Your Retirement

One day everyone has to retire from the work. So it’s quite obvious that the capacity to earn will go down after the retirement or in maximum of cases, the earning capacity is often nil. But life does not stop after the retirement. It continues so the need for financial support is most sought after. After the retirement you need a secure source of money. “How will you have a secure source of income?” this is a question that often haunt everyone prior to retirement as well as after the retirement. The answer to this question is that it is you and your own money that works for you. To this end you need to get your finances and retirement planned. Always remember that there is no age criteria to start financial and retirement planning. But yes it is advisable that as early you start better and easier it is to achieve your financial and retirement goals.

The retirement planning can be started any time in life. But when you start it early in the life it is like catwalk and those who start retirement planning late it is problematic for them. They have to put more efforts and money to secure their life after retirement. There are some dos and dos not for the retirement planning.

First talk about early buds. For one who starts retirement planning he should take care of these things

  • Start as early as possible.
  • Allocate a fixed percentage of your earnings for the retirement kitty not a fixed budget.
  • This will help you make your portfolio bigger with time.
  • As grow your earning increases so you can afford more for retirement kitty.
  • Invest in value investment avenues. This will give higher returns.
  • Invest in stocks and mutual funds more in early life.
  • If you do not have requisite expertise to invest in stocks, have an adviser to invest in equity, mutual funds.
  • Early starters will gain huge benefits of power of compounding.
  • By investing just a few thousands every month for 30-35 years they can have millions when they retire.
  • Have and follow a proper tax plan to reduce tax payments.

Those who start retirement planning late in their life they have to be more conscious about the plan. They need to first analyze needs they have as a person in thirties and forties has so many responsibilities and has to take care of all those. So it is very much important that everything is considered and discussed during the retirement planning. Some dos and dos not for late bloomer:

  • Only a comprehensive retirement plan can help a late bloomer.
  • Do the need analysis properly.
  • Disclose all the financial positions good or bad.
  • Disclose all the expected needs of future. This will help in planning a comprehensive retirement plan.
  • Have a clear plan about when you will retire and at what terms.

After the retirement plan is done, do invest in stocks more or equity, mutual funds more as you not the luxury of power of compounding to huge extent. You need to grow your money faster.
For this purpose you need to have two different sub accounts for investments. One will serve the long term investment needs and the second will support the first account.
You need to make it sure that your money without any risks so allocations in two different sub accounts helps a lot.
The first sub account will be invested in secure investment tools and the second will be in high yield product such as stocks.
After reaching a certain level, some part of money will be withdrawn from the second sub account and should be invested in the first account. This should continue.
This will help to bring a balance.

It is important for everyone to be conscious about their investments and a watchful eye is always needed.

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