Basic Guide in Setting a Retirement Plan

Setting up a retirement plan is interesting. It is easy to make a retirement plan especially if there is a certified financial planner beside you. Do you want to know how to set up a retirement plan by yourself? Keep reading this page and find out how you can easily create a plan for your retirement. There are two sides in coin; head and tail. In life, those sides are “success” and “failure”. In retirement, there is also “success” and “failure”. How do we know if we retire successfully or “failed”? You have a successful retirement if you retire rich, young and comfortable and you failed in planning for retirement if you retire relying to someone else (loved ones, friends, charity, government) for your basic needs like home, medical, food and other necessities in life.

I would prefer the first option. I know you also prefer the first option; to retire young, rich and comfortable. However, whether you’re planning to retire early or to retire at age 65, you need a careful planning. How to set up a retirement plan is one of the most asked questions by readers of RetirementPlanningIQ.com, I do hope this guide will somehow help and guide you to start planning for your retirement.

CFP or Certified Financial Planner has a big role in your retirement. If you want to make your retirement a successful one, you need to consult with the professionals. CFP knows how much money do you need to retire and how much money you should invest per month to have enough money for your retirement. If you are not willing to spend money in hiring a CFP, you can do it yourself.

Basic Guide in Setting a Retirement Plan

Ask the following questions to yourself. These are basic questions related to retirement planning. Answer these questions one by one in your favorite notebook or diary.

Image Credit: Hamza Hydri Syed On CC 2.0 – retirement plans

Question 1: When Do I Want to Retire?
Do you want to retire early? Do you want to retire at age 45, 50, 55? How many years you still have? If you want to retire at 60 and you are 45 now, that means you still have 15 years preparation.

Question 2: How Much Money Do I Need to Retire?
You will only know exactly the amount of money you need to retire. If for example, your monthly income is $5,000 and your yearly income is $60,000, how much money do you need to save and invest that earns $60,000 per annum? The idea is making money work hard for you.

Further Reading: How to Retire Early?

If you have $600,000 that earns 10% per year, you can make $60,000 per year. That means, your target goal is to have an asset worth $600,000 that earns 10% every year that generate income for you without any effort on your part.

Further Reading: How Much Money Do I Need to Retire?

Question 3: Where is the Best Place to Retire?
Awhile ago, I wrote an article about choosing the best places, best states, best cities or even best countries to retire. Where do you want to spend the rest of your life? In New York City, in Hawaii, in Pennsylvania, in Netherlands, in one of the best countries to retire in Asia like Philippines, Thailand, Indonesia? Ask yourself.

Question 4: The People I Can’t Live Without?
Aside from asking yourself where to retire, also, think people (loved ones) do you want to spend the rest of your life? Even though you are in the best place to retire, you have enough money, you are earning money during your retirement, but, you have no one beside you, you will only become unhappy. Remember our goal is to retire young, happy and rich.

Question 5: Activities
Retirement is exciting especially when you retire early. Imagine your life doing nothing but all pleasures and enjoyment. That’s freedom. That’s what people are dreaming of. In setting your retirement plan, you should ask yourself; what to do during my retirement? Will you do gardening, playing with your grand children, fishing, traveling the world, visiting your favorite places?

Question 6: Expenses in Your Retirement
If you are residing in California now and you want to live in Hawaii during your retirement, consider the cost of house expense and taxes. Also, during your retirement, it is imperative to think other expenses like medical bills and enough funds when you want to do something.

The purpose of setting up a retirement plan is not just to know where to live and to whom you will spend the rest of your life. The purpose of a retirement plan is to have an idea on what to do to prepare you financially. The bottom line in retirement planning is to think whether or not you want to retire comfortably. That’s the reason why, in retirement planning, investing money is very important. So that you will have not just enough money but having more money working hard for you during retirement. Don’t end in just saving enough money. Plan to make your money work hard for you.

I hope this guide on how to set up a retirement plan is very useful to you. Always visit Retirement Planning IQ for more important things to talk about. Subscribe to this blog via email to get the latest updates. It’s 100% FREE. If you have any questions, feel free to ask using the comment box. I will also appreciate if you share your ideas on how to set up a retirement plan easily. Do not forget to tell your friends about RetirementPlanningIQ.com. Thank you!