Old age is one tiime when everyone wants to really relax, have fun with the family and forget that problems ever existed. However, hardly do most people ever get to experience this as they are always caught up in expenses and do not get to save and plan for their retirement. But then how does one plan for their retirement when there are always bills to pay, one need or the other to be met?
The first Step in Retirement Planning is to… Assess your current financial situation. Retirement planning and budget planning have almost the same process. You need to balance your income and expenses but the difference is that you are balancing it for now and the rest of your life. Start by estimating how long you will live and you need to be optimistic. Also, determine how much you would need for each extra year from when you stop working. Then set a target for how much you need to save every day, week, month and year to make that retirement lump sum.
Step 2: Reduce Your Unnecessary Expenses: Almost every expense has an alternative and a cheaper one at that. Housing, debt, extravagances, or unnecessary expenses should be reduced. Also, eliminate debt. You really should not retire carrying debt, especially high interest debts. Reconsider your housing. Many times, we make considerable amount of money, move to a rich neighborhood and then become poor again.
Step 3: Consider How To Increase Your Income: Increase your income by working more jobs so that you can reach that benchmark that you have set for retirement. If you cant do that, delay your retirement age.
Step 4: Consider Products That Will Safeguard and Stretch Your Assets: You don’t want to live like royalty for the next 10 years and spend the following 10 living in poverty. The bad news is that without reliable income in retirement you can never account for every scenario – illnesses, longevity, disasters, and more. The good news is that many financial products and professional advisors exist to insure that you can live comfortably for the rest of your life. Most notably, lifetime annuities are insurance products that offer guaranteed income for life. Lifetime annuities insure that you will NEVER run out of money. There are also long term care insurance products that will cover assisted living expenses in the case that you develop an illness that requires constant care.