Retirement Income Planning: Learning to Plan for Retirement

Financial Advisers Guides We cannot stop old age which is why need to come up with a sound retirement plan so we

can assume a comfortable life when we no longer have careers. Eventually, each one of us

will leave our careers and jobs because the company says so or because our body can no

longer take up strenuous activities. Whether we leave the company due to regulations or

health concerns, we must formulate a retirement plan because expenses will continue to

burden us.

How to Make a Retirement Plan

To the uninitiated, coming up with a retirement plan is threatening. It is because there are so

many factors that will influence retirement like debts, retirement lifestyle, health expenses,

utilities, and many more. Discussing a retirement plan with a financial adviser will allow you

to understand the whole scenario. The financial adviser will help you formulate a solid future

by discussing the available retirement options that will cover your expenses when we

assume retirement.

What are the Available Retirement Options?

The amazing thing about planning for retirement is that there are lots of feasible options to

choose from. These options range from government backed programs to private pension

plans.

401 (K) and Roth IRA

We can plan for our retirement while currently working under a company or an employer

through 401 (K) and Roth IRA. Both options work by contributing a portion of our salary

through mutual funds like stocks, bonds, and money market investments. The 401(k) is only

accessible if we reach the target age of 59 ½ while Roth IRA is accessible if the account is

already 5 years old. Moreover, 401(k) is taxable because the contributions are made before

taxes while Roth IRA is not because the contributions were already taxed. If you want to

know about the pros and cons of these options, talk to an experienced adviser or you can

discuss this matter with your employer.

Private Pension Funds

This scheme is similar to the options provided by the government but the only difference is

that it is handled by private pension companies such as insurance providers and investment

firms. The scheme requires you to invest in their different programs. You will be able to

withdraw your savings when it matures or when you reach a retirement age.

Retirement Planning Advice

How to Plan for Retirement

When planning for retirement, you need to consider factors that will influence your lifestyle.

Your plan should at least cover the expenses you will incur during retirement. As such, it is

best to talk with your partner if you are married or talk to investment advisors to understand

the options available to you.

Retirement is a stage in our lives where we leave our careers for certain reasons. Common

factors that influence retirement include age limits enforced by companies, health issues, and

the option to choose a less strenuous job.

Retirement can be seen as a positive and a negative thing. It is a good thing if one was able

to prepare for his or her future in the early stages of life while it is a bad thing to those who

were not able to prepare for their retirement. As such, it is ideal to plan for this phase early on

so we can face a brighter future even if we will be forced to quite our job.

First Step to Retirement Planning

When planning for retirement, it is often recommended to consider the lifestyle you want to

assume when you leave your job. For instance, if you want to travel the world or you want to

earn that degree you missed during school years, you will consider a retirement option that

can cover such lifestyle. On the other hand, you can formulate a retirement plan based on

the expenses you will assume such as mortgage, health bill, utilities, and more.

Guide to Retirement Planning

You can always save a portion of your salary while you still have work. Investing it to mutual

funds and other investment schemes is the most sensible thing to do. The earlier you do this

the better because as time goes by, your investments in these programs will accumulate due

to interest. The money you earn here will secure your retirement life. Without a doubt, you

need to approach this with caution because putting a portion of your income in investment

programs involves risk too which is why you need to study the program carefully.

You can also save up for your retirement by participating in schemes provided by your

company.