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Retirement Planning

Steps for planning a retirement?

By Nik RoyPublished 3 years ago 3 min read
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source: Pixabay

Everyone is familiar with the word ‘RETIREMENT PLANNING’. However, only a few people can craft an established plan to retire peacefully and comfortably. Everyone is aware of the upcoming financial constraints complimented with the retirement if proper preplanning is not done. It is not a one-day process, it involves several steps, along with time. Here is the way to get a peaceful retirement.

CALCULATE DREAM EXPENSES:

In middle-class families, necessity is the prior concern, where first the needs of the families must be fulfilled. When it is retirement time, one first has to decide that what type of lifestyle they want to have and what their retirement goals are. With retirement, one may not be provided with a regular income but with time they can fulfill all their remaining dreams and big expenses like a daughter’s marriage, living in a dream home or buying a car with a proper management plan.

EXPENSE TO SAVING RATIO:

Now, if one has preplanned their dreams or their important expenses, it is also important to find the amount they need to save before retirement to fulfill their expenses. The prior calculation of their expenses with respect to retirement is important.

RETIREMENT AGE:

For an effective retirement strategy, one must calculate the time gap between their current age and retirement age. The longer the gap, the stronger their ability to handle the expenses. Early rising is always considered beneficial either for health or for pocket, so the sooner the better to plan the retirement. Starting at a young age, one has to take their retirement seriously.

INVESTMENT OPTIONS: Now, as the planning age is decided then another important step to follow is to decide how to invest the money for the long run.

STOCKS FOR GROWTH:

This is one of the exclusive ways for most people to invest their money in stocks for their future savings. It completely depends on the person that how much risk ability they have, but the greater the risk the more the chance to get profit from it. For instance, if one would invest in their thirties in equities they would be able to earn a magnified amount with respect to their investment in their seventies.

BONDS FOR SAFETY:

Another security option of investment for future earnings is bond safety. Here the risk factor is far less than the stock market, however, the interest rate is too low which would enhance the bank balance with a fixed amount of income. Completely the choice of the individual, depending on their retirement goals and needs and the risk-taking capabilities, to choose any of the above plans or maybe any other plan they have for their better retirement planning.

CURRENT SAVINGS-FUTURE PLANNINGS:

Time runs really fast. Inflation is taking place rapidly and the purchasing value of money keeps on decreasing. It is believed that almost after a decade the value of money decreases almost ten times. So, for a proper retirement plan, it is one of the wisest plans to foresee the needs with the future expected expenses. To begin with, one must determine their retirement goals and requirements and then undergo calculations of current savings with future expenses to match their needs.

CUT OFF THE EXPENSES:

Last but not the least, so far one has set their retirement goals and have foreseen their expenses, now the concern is to save the desired amount to live life after retirement. For that, the easiest and most effective way would be to cut the expenses today to enjoy it in the future when there would be no job but still, we would have enough capital to survive, to live, to enjoy life in a relaxed mode.

To summarize, retirement is not a one-day plan, so the plan today is to enjoy it tomorrow.

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About the Creator

Nik Roy

I’ve always loved writing and sharing what I’ve written with others. Reading, whether for finance & technology, is a very powerful interest in my view.

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