1. Have an idea when you want to retire. The usual age range is 60-65.

2. Know the lifestyle you want to live, and this will be determined largely by your financial position now and then. Are you going to live as you do now or will you be improving on your current arrangement? Perhaps you are currently living in four-bedroom house in a nice community but you might want to trade this in for an apartment. Maybe you want to travel to places you have never visited. Maybe you will need to trade in the vehicle you now own for an earlier model.

3. Ascertain how much money will be necessary to maintain the lifestyle of choice. It is recommended that a minimum of 60% of your annual pre-retirement salary should be adequate as annual income in retirement. Have a budget that’s just for retirement.

4. Examine your current investments. This should also include your pension, health and life insurance so that you will have an idea how much funds you will receive when you retire. Will you be receiving a pension check each month, and will your life and health insurance be adequate?

5. Acquire the services of a trusted financial adviser. If you don’t already have one, you’ll need to find one soon. Ask your friends and co-workers for referrals.

THE MIDDLE YEARS

As investors shift into the 36 to 45-year-old mid-life grouping, their time horizon will begin to change, and so will their appetite for and tolerance of risk. It is inevitable, therefore, that the investment strategies will also be altered to suit these changes.

Such persons will gradually begin to lower their appetites for speculative stocks, preferring growth-oriented and/or income-generating stocks and bonds with good potential for capital gains but less risk, in addition to safer fixed-income government securities. At this stage, an investor should be looking to solidify the portfolio base and to build for retirement if he/she had started earlier.

If they are just starting, however, these individuals would have to, more than likely, contribute more to achieve their retirement objective. The general advice is that you should project your retirement expenses based on your needs. Think about how you want to live in retirement and how much it will cost. Then calculate how much you must save to supplement social security and other sources of retirement income. Budgeting will be important in this planning process as well.

SOME BASIC RULES

Begin by determining your monthly income and expenses, identifying necessary and discretionary expenses. Some rules to live by include the mantra to save a basic 10% of your salary. Another rule is that your housing costs should be easily within your salary range.

Still another is that you should avoid purchasing motor cars which are expensive to maintain and provide inefficient gas consumption. If your goal changes, then revisit and revise your plans. You will need to do this if market or personal conditions change.

Real estate has historically proven to be a good way to beat inflation. But, do not put all your eggs in one basket. Focus on your asset allocation more than on individual picks.

How do you divide your portfolio between stocks and bonds will have a big impact on your long-term returns. Stocks are best for long-term growth. Stocks have the best chance of achieving high returns over long periods.

Importantly also, do not neglect retirement account options, a tax-free solution for those planning for retirement.

Other means of saving towards retirement include purchasing insurance and savings and investments. Ensure that you purchase adequate health insurance, as ill-health in old age can have a devastating impact on your savings.

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!

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.