Retirement: Three Areas to Focus On when you are planning for your retirement. Many people do not even think about retirement until they are in their late 40’s or early 50’s and by that time it could be too late to save enough money to live the kind of life that they dreamed of in retirement. Start planning and above all saving for retirement as early as possible to avoid surprises. At the very least you will be able to retire with a pleasant nest egg, if your company or government pension plans more than make up for your savings. Too many people have counted on a company pension plan only to find that it disappears when the company goes bankrupt. Retirement: Three Areas to Focus On
Retirement: Three Areas to Focus On
These three areas that consumers should focus on are as follows:
- Mortgages & loans
- Savings plans
We will discuss each one in more detail as consumers planning for retirement are forced out of jobs or find that they are being forced to retire early or other reasons such as health, supporting loved ones, and a variety of other issues.
Income – as part of your plan for retirement it’s important to understand where your income is going to come from. This could be a combination of government pension payments, employment pension payments and from your savings.
Mortgages and loans
Most people would like to retire with their home fully paid for, the car fully paid for and no other loans to be concerned about. This is an excellent objective however the reality is that the majority of people will retire owing some money. Take a very close look at the debt that you have today, how quickly you will be able to pay it off and whether you will carry any of that debt into your retirement years. Understanding the loan payments and mortgage payments and the impact it will have on your income and money left over for other activities will play a big part in helping you decide when you can financially retire.
Once you have looked at your income, and the debt that you will carry into retirement it is now an easy matter to figure out what savings rate you will have to achieve while you were still working in order to live the kind of retirement life that you would like during retirement. This is all about quality-of-life during retirement and ensuring that you have sufficient funds available to live that life. You may find that you need to save much more money to sustain your lifestyle or at least the lifestyle that you plan for your retirement.
Take a few minutes now to prepare initial estimates of what your income will be during retirement, what your loans and mortgage payments will be, and also your current savings and how much money per month you can expect to derive from your savings. Once you have these figures you will have a quick understanding of whether you need to go into more detail and plan for your future retirement.