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The principles of Financial Planning for Retirement LifePosted by SEP-SOLO-IRA-401k-ROTH on: 2007-01-30 14:52:13 in category:
Retirement Planning News [ Print | Permalink / 0 Comment(s) ] Natalie Aranda Retirement is something that needs to be planned for and it is best to start as early as possible. If you are reaching retirement age and haven't started planning for your retirement, don't panic. There is still time to take some proactive steps in order to ensure the best quality of life after you retire. If you are just starting out in the work force, retirement might not be on your mind but the sooner you start planning, the more money you can save. There are several main principles of financial planning that you will want to pay attention to when you are planning for your retirement. First, you will want to make a realistic goal regarding how much money you will need once you retire. You will most likely spend seventy to ninety percent of what you are making now when you retire. You will also need to take a honest look at your finances to determine what your financial position is now. You should examine money flow in and out of your bank account as well as make a budget to help you pinpoint where you can reduce your expenses. Once you know how much money you want to have once you reach retirement and where you are now, you'll want to determine how much Social Security you will be receiving. Typically it will be about forty percent of what you earn now. You can get a free Social Security statement by contacting the Social Security Administration. Take a good look at what your employer offers in terms of pensions, profit sharing and 401K plans. If you are not already contributing to these plans, you should start. You should also start putting money into either a traditional IRA or a Roth IRA. You will be able to save on your taxes as well as save for retirement. Younger employees might also consider investments that might make you more profits, but are more risky. Retirement planning is not complete without making sure that you have adequate life insurance. If you have a life insurance policy, you may be able to sell it if you no longer want it or need it. This is called a life insurance settlement. If you are just starting out in the work force, retirement might not be on your mind but the sooner you start planning, the more money you can save. Life settlements can get you immediate cash which you can use to help fund your retirement. With a little bit of preplanning, saving and investing, you can enjoy your retirement without having to worry about money at all. About the author: Natalie Aranda is a freelance writer. |
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