Retirement Planning

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You are working really hard through out the life to earn the living for yourself and for your family. And after all every body with out any doubt will be looking for the time to get retired from the working life and have a nice and enjoyable time as early as possible in the life.

But, planning for your retirement can be one of the most difficult tasks in your life. After all, you have never done it before. So, how can you plan for the retirement?

One of the most important things that one has to do while planning for any type of financial situation, from buying a home to retiring comfortably, is educating himself.

Normally, people are basing their retirements on so many pre-conceived notions that have never been backed up. But, in reality there are many a things that one should know in preparing to retire.

The first and the fore most thing is that one don’t necessarily need to maintain the same yearly income in retirement as he did when he was working. The truth behind is that most people will only need around eighty eight percent of their pre-retirement income to live comfortably. How ever this percentage is not valid and same for all the individuals all around the world who are planning to retire.

Just remember that retirement is only an individual thing. One has to look at his needs to determine how much he is going to spend. Analysts recommend to always aim at more than one will ever need. What they say is, it is better to pass that money on than to run out of it early. They advice people to go ahead and to save too much of money (That is as maximum as possible).

Don’t simply assume that you are on track. Sit down and do the math. Almost 45% of working-age couples are at risk of not being able to retire on time. You have to either save more or work longer. Don’t plan on relying on state pension if you have yet to reach middle-age. It may not be there in twenty more years.

And the young aren’t any more prepared than the older generation of baby boomers. In fact, younger workers are more vulnerable. They have higher levels of debt and haven’t been encouraged to save like the previous generations.

However, to day’s generation of younger workers are more money savvy than their parents. These people understand the importance of investments and compounding interest. In addition to this, as this younger generation is seeing their parents struggling in retirement (most parents); the youngsters have time to adjust their savings habits so that they don’t have to face the same problems in retirement.

Never ever rely on the equity in your home to finance your retirement. With the new reverse mortgages, this trend may be shifting a bit, but you should remember that you can only use a portion of your home’s value in a reverse mortgage (Very important to remember this point). At the current interest rates, you are able to take out approximately forty five percent of your home’s value. Hence you should not be dependent on the equity in your home for your living. There is no way for you to know where interest rates and property values are going.

It is definite that you will have to save more than what your parents saved for retirement. While they can offer pointers, remember that times change drastically. One of the most important things to consider is health care costs, which are constantly rising. People are living longer (The average life of a human has increased by 19% in the last decade), thus needing more retirement savings. As people say, with the changing of times, comes a changing of saving strategy. You will need to continue to save, even though you may think you will be fine. As long as you are able to work and save, do it.

But we can say that, it is not that hard to save money for the purpose of retirement. All you have to do is consistently set aside money each month towards your retirement (Sounds simple!). Invest that money in a wise enough manner and keep that money un touched until you get retired. If you can contribute ten percent of your paycheck every month sincerely towards the savings for retirement, there is a great chance of seeing your money grow with a very rapid pace over time.

Most analysts say that one should expect to work until he reaches the age of 67 year, without ever touching ones retirement savings or investments, so that one can retire in a fairly comfortable manner. And one can really enjoy the post-retirement life with the family in a much better way.

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