Developing your own personal retirement income strategies can be a little daunting for many people. This can be a large complex problem if it is not broken down into individual small steps. But if you can break it down and use the assistance of a financial planner to help with some of the steps, consumers can end up with a well thought out plan that will help them meet realistic goals and objectives for their retirement. The wheel in the picture demonstrates how to get started. Not that this is a circular wheel with no end point. That is because after you have developed your first view or your retirement income strategies, each consumer will at regular intervals update the plan following the same systematic approach. We will discuss each of these steps in a little more detail.
Retirement Income Strategies – Self Assessment
The first step is to gather all of your financial data that you have currently. This includes your current savings as well as your current debt. It also includes loans, mortgages and retirement plans that you may be eligible for when you retire from your company or personal plans. This is a snap shot of your financial situation at the present time.
Goal Setting
The next step is to set some realistic goals. These include when you anticipate retiring, when you will have your home paid off and how much debt you may carry into retirement. What are your plans for retirement? Will you travel a great deal or do you plan to continue working. What large expenses will you have in retirement. How do you see your life in financial terms when you retire. This leads to understanding the level of income you will need to generate to maintain the lifestyle that you desire in your retirement years.
Information Gathering
Gathering all of the information you will need to develop your plan is the next step. Investment plans, investment advisers, interest rates, dividend rates, payout rates from mutual funds, retirement plans, current expenses and costs for everything from heating your home to budgets for groceries etc should be considered. Use several simplifying assumptions to make it easier. Use a program or work with an adviser to completed your retirement plan strategy.
Retirement Income Strategies – Taking Action
Once you have a plan, most likely you will find that you need to make some changes. They could include focusing on paying off your home faster. Or saving more money for retirement that you planned, reducing your expenses etc. The important thing is to begin taking action now. Focus to ensure that your retirement strategy, goals and objectives can be met.
Reviewing and Updating
Are you done once you have completed all of these steps? Some people will feel that they are done and can afford to sit back and relax until they retire. This is not true. Our lives change, we retire earlier or later than planned. We have more expenses than planned, inflation is higher, our goals may change and on and on. At the very least review your retirement strategy once per year. Then update everything. You may find that your goals, savings plan etc may need to be adjusted slightly. You will want to ensure that you can enjoy the life you planned for in retirement.