What Is Retirement Planning? Essay

1623 words - 7 pages

Retirement planning is a way to insure that you will have enough income to live comfortably when you retire. Most people will be retired 25 years or more, and careful planning is the key to successful retirement. Why would you want to have bill pressures and mortgages when all you really want to do is relax, or follow that dream of traveling the country in an RV?

There is always Social Security, and you may have a pension, but will this be enough for you to retire comfortably? Do you plan on staying in your present home, or will you be moving? Do you plan to travel? These are only a few of the questions you will need to ponder when you prepare for your eventual retirement.

You will need to ...view middle of the document...

You really need to plan wisely for retirement.
Chapter 2 – How to Start Your Retirement Plan

There is more to retire planning than putting money into a 401K, having a pension plan, or opening an IRA. This is a great place to start, but you need to plan for all of the years you will not be working. You may be retired for more than 30 years and the effort you put into planning your retirement, the better off you will be.

You can begin retirement planning at an early stage of your life, or you may need to start a bit later in your work career. Whatever your age may be, you will need to put together a plan for your retirement. Starting at an early age will give you more time to build investment portfolio for your retirement.

After you have your investments set, you will need to monitor the investments with your financial advisor or broker. You will also need to set up tax shelters so that you are not swamped with taxes when you retire.

Starting a retirement plan is the hardest part. It becomes easy for us to think about retirement as an event that is far away, and put off planning for it. It is good to remember that the years will pass by quickly and you will find you are faced with retirement just around the corner. This could cause a loss of thousands of dollars for you. This amount could be the difference barely getting by and being comfortable when you retire. When you are between the age of 20 and the age of 40, you are very busy buying your first house, furniture, a car, and thinking about sending your kids to college. You may feel as if you are not able to put any money into a retirement plan during this time. Know that even a small amount of money, invested wisely, could make a big difference.
Setting Goals

Now that you have decided to plan for retirement, where will you begin? Whatever goals you set, you will need a certain amount of money to accomplish them. You actually need a plan that will cover your retirement for 30 or more years. You need to figure how much money you will need when you retire.

Creating a Budget

If you don’t already have a budget, you will need to create one. To do this you will need to keep track of your monthly spending. Begin by keeping a journal of every penny you spend for three months in a row. When you look back at this, you will see how you have been spending and where you can cut expenses. Then you will be able to manage your budget in a better fashion. When you make out a budget you will need to include a payment to your retirement plan, even if it is just a few dollars.

Members of your Family

Talk about your plan for retirement with your spouse and other family members. Both you and your spouse will probably retire around the same time, so you will need to make your plan together. When both partners have a career, they will both probably be putting money into a retirement plan. Sit down together and develop a plan that you both agree on.

Keep to the Plan

You may be tempted to take money out of...

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