What is retirement planning all about? Its definition, meaning and importance? Today, here at Retirement Planning IQ let us spend few minutes to know more about this subject. Find out exactly the meaning and definition now.
Retirement Planning is a very important planning for every individual who wish to retire well and comfortable after a long period of work. In planning for retirement, an individual does not only plan his financial future but also, every areas of his life such as lifestyle. A retiree will plan for his retirement because he want to ensure he will become happier, relax, comfortable and most of all he will enjoy the rest of his life.
What is Retirement Planning in Simple Sense?
Retirement planning is a strategy to prepare the golden years of an individual after working. In retirement planning, he should know how much money he really need to retire, how much money to save for retirement, how to save it using different retirement accounts, when to retire (the retirement age) and where is his preferred place to live in.
In retirement planning, there are definite questions to make it simple. You can create a retirement plan easily after you read and answer different retirement questions.
An individual will do whatever it takes to learn retirement planning. He will ask for an advice, he will search for tips by reading articles online and retirement books.
Some people use retirement calculator to know how much exactly the amount of money they should save in their retirement accounts. Talk to your employer on how can you open a retirement account. If you are a self employed individual, start talking to a Certified Financial Planner regarding with this matter.
- 401(k) or 403(b) offered by your employer.
- Solo 401(k).
- SEP IRA. Simplified Employee Pension.
- Simple IRA.
- Roth IRA.
- Health savings account.
Retirement Planning is Useful
Now you know what is retirement planning all about. It will only become useful if you follow what is written on the plan. If you failed to follow and take action according to your retirement plans, the result will only make you a “sad” retiree.
Some retirement plan indicates that age of an individual. Some people wants to retire early, that is the reason why they are saving early. According to the law of compound interest, the earlier you save money, the more chances your money will grow. If yuo save money fro retirement when you are at 20, the chances of retiring early is very high. But, don’t expect to retire at 55 if you just started saving money at age 45. I hope you got my point.
Retirement Quote of the Day:
The longer you work, the more money you’ll have for retirement. But the longer you work, the less time you’ll have to enjoy that retirement.
— Wall Street Journal
In my next post, let me share to you other basic guides and advice. So, stay tuned to Retirement Planning IQ to know more what is retirement planning and how to make it more effective.