Category: Retirement

Planning For Your Retirement

Ideally, retirement is the time in your life to indulge in hobbies, travel, spend time with your loved ones and engage in activities which have been deferred while you were too busy working, raising/educating children and advancing careers.

Achieving these retirement goals cannot happen by chance or wishful thinking. It is attainable by conscious and realistic planning which must begin as early as possible. The earlier this planning is effected, the less burdensome and more attainable the retirement goals will be. Adequate retirement planning assumes basic needs such as food, shelter and increased health care costs are taken care of with sufficient capacity to allow one to indulge in some of the deferred activities of your working life.

VARIOUS RETIREMENT PLANNING OPTIONS

Planning for retirement is made easier by the availability of various pension-savings options. These savings options aim to assist the saver to achieve retirement goals by utilizing available tax benefits (p.s. do you currently use software for income tax calculations?). Segregating pension savings prevent them from being used for more short term consumption.

Pension savings should constitute a significant portion of the net worth of the average employed/self-employed person. With life expectancy increasing, the retirement years are also increasing and a well-planned retirement plan represents the difference between financial security and comfort on retirement as opposed to a marginal existence during theses years.

Individuals can save towards their retirement through superannuation funds and retirement schemes. A superannuation fund is a pension plan established by an employer for the benefit of his employees. On the other hand retirement schemes facilitate self-employed persons and those persons who are not members of a superannuation fund and are not employed in pensionable posts.

However, saving for retirement is not limited to these pension arrangements. If an employee believes his pension funds will not be adequate to meet his lifestyle needs on retirement, he should investigate and invest in other investment arrangements which are available from financial institutions.

Plan for your future; investigate retirement planning options now!

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categories Retirement | , 22 Jan 11 | comments Comments (0)

How Important Is Your Retirement?

The challenge with retirement planning, is that it is not one of those events where you will see the effects of not planning immediately and certainly you will not see the negative impact until when it hits … in your future.

Consider this … electric bills, car loan payments, rent, school fees, groceries; these are all immediate bills that must be paid NOW, in the present. If these are not dealt with the negative impact is immediate: lights off, additional interest on car payments or if really severe – you cannot register for school or there is no food to eat at home. The negative effects of not providing for these imminent bills are clear & present!

It’s not as obvious when the impact of an action is not immediately evident – for example, making your life insurance policy lapse. The effect of this is in the future and therefore does not appear to be as important, as the impact is not felt now!

This period of life requires planning today in order to reap benefits tomorrow. Retirement is typically defined as the point where an individual stops employment whether they are self-employed or employed to an organization. When this new stage of life (retirement) is attained there are a number of changes to which one has to become accustomed. Most important of all, is not receiving your regular stream of income, which you have had for the past 40 years of your working life! Effective Retirement Planning can provide the support you require for your retirement years.

But what is effective retirement planning? It is taking the necessary steps to sit with a financial advisor and ascertain the best way to effectively plan for what you want in your future. One of the simplest and most convenient ways of doing this is becoming a part of a pension plan. Pension plans offer significant tax-advantaged savings towards retirement.

If you are employed to a company, ensure that you are a part of the employer-sponsored pension plan and maximize your contributions to this fund. However, if you are self-employed or employed to a company that does not offer a pension plan, then you can become a plan member in an Individual Retirement Account.

It is time to take responsibility for our future and begin actively saving towards retirement. This benefit is no longer limited only to persons employed to an organization, as both self-employed individuals and persons employed to companies who do not offer a pension can now save in a structured pension plan. With the improvements to Approved Retirement Accounts, now being offered by financial institutions, these persons can now take advantage of the tax savings, which are an inherent feature in pension plans.

Retirement must be treated as an important aspect when planning your finances. The effects of not planning can have far reaching impact for both yourself and your family.

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categories Retirement | , 6 Mar 10 | comments Comments (0)