From day one, everyone looks forward to retirement, that day where they can finally let go of the stresses of the daily grind and spend their leisurely days traveling, reading and basically having fun. As compared to previous generations, we have longer life spans so we all expect our golden years to be fulfilling and rewarding.
Instead of waiting for people to help you plan your retirement, you should do it yourself. Although retirement planning is probably one of the most draining activities where one spends loads of time perusing over financial and brokerage statements, benefits brochures and insurance policies. One does this in terms of the benefits of long term planning: if one retires earlier, he/she will think and anticipate less on government-funded plans which only gives a pittance of a pension and focus more on the beauty of life.
Why Retirement Planning is Necessary
Obviously, retirement planning isn’t all about numerous hours of stress by chugging down numbers and analyzing mutual funds: it’s about fixing and deciding how you will live the final years of your life. If one can balance financially and plan fully on a retirement plan, rest assured that your future is secure.
But remember that retirement planning isn’t a singular activity. It is something that stretches forth to decades, spanning your 30s, 40s and 50s. In every decade, one must rethink their strategies since you are inching closer and closer to retirement, thus one must forgo risky investments and go to bonds and reliable mutual funds as the years pass by.
Build the Right Retirement Plan
A retirement plan must be suited to your risk tolerance and apparent need for cash when retirement comes. If you prefer a general 401(k) that has a good balance of everything, you may go for equal amounts of low-risk bonds and riskier stocks or you may also opt for an assortment of mutual funds that both have high-risk and low-risk funds.
Generally, risk tolerance is congruent to one’s age. If you are on your 20s or early 30s, you may opt for a more stock-saturated mutual fund in the hope of getting a good return because of the added risk stocks give. If ever the worst comes and you face some declines in the stock market, you still have a good 20 to 30 years to compensate for the losses.
On the other hand, if one is teetering on the 40s or 50s, it is necessary that one must go low-risk in his/her investments. One’s mutual funds must now be concentrated more on low-risk government bonds, which virtually assure no losses and minimum gain, if there will be no huge political crisis, of course.
If one follows this general age/risk rule, then one has better chance that one has an ample amount of cash to spend on the pleasures of life when retirement age finally comes.
One has always dreamt of traveling the world, playing golf all day and enjoying the best life can give. But one cannot do all that while working away in the office. Therefore one must give importance to the rising necessity of building a retirement plan.
It is probably as stressful as work itself, but if you can carry all that heap of information and mix it into the delicacy that is a finely tailored retirement plan, then rest assured that your dream of tasting and relishing the best of life is definitely reachable by 65.
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