Plan for Your Retirement

Your Retirement
You are never too young or too old to plan for retirement.The earlier the better, but it is also better late than never.Nonetheless, it is desirable to inculcate the saving habit at a young age.In fact, saving should be part of your lifestyle.It is wise not to rely solely on your EPF as your retirement fund because you may not have enough in your account to provide you with a comfortable lifestyle.

Young adults normally do not think they are going to retire one day.Retirement is difficult for people of all ages. Even people in their 40s do not want to face the prospect of retirement. They have obligations – there is the house, the children’s education, the parents’ health care, and 1001 things to take care of first.

There is also the fear of the unknown. Not knowing what will happen to you when you are old may sometimes prevent you from taking stock of your financial welfare.You prefer to live for now rather than plan for the future.Perhaps you are afraid of being told that you are not on track when you start to plan for your retirement fund. You know that you have spent too much money, your income earning ability is not improving and you are not able to increase your savings.

If you start saving as soon as possible, you will be in better shape than you think you would be. If you have been regularly saving some money and cultivating saving habits,you will find it empowering for your personal self-worth.

Basics of retirement planning
As in any planning process, you need to know where you are at present:

• How much savings or assets do you have now?
• What is your monthly income?
• What is the percentage of your income contributed to EPF or other retirement plans?
• What rate of return do you want on your investments?
• How many years do you have until retirement to earn your money?

After analysing your current assets and liabilities, estimate your spending needs and adjust them for inflation. Then decide when you want to retire – at age 45, 55, 60 or 65?

Calculate the monthly retirement income needed for your desired retirement lifestyle.
Your retirement planning should include debt reduction, budgeting, diversifying investments and, believe it or not, maintaining good health through diet and regular exercise.

The question of health is vital during old age. Health costs can be a major expenditure and a drain on retirement savings. Even if you have medical and life insurance that covers critical illness and disability, this may not include all the procedures and prescriptions that you need to have.Sometimes certain illness are only partially covered or not at all covered under insurance benefits. Therefore, adequate retirement planning has to be done for maintaining and living a healthy life.

A balanced life
While money is necessary in today’s world, it is not everything. Do not make it the sole reason for what you do in your life. Health, family and spiritual wellbeing are
important elements that contribute to happiness. We should also make regular donations and give to the less fortunate to alleviate their hardships and misfortunes. It is very important to create a balance in your life.



By saving early in your adult life, you may find that you have enough to enjoy some of your money even before you actually retire.
source:money sense

Identifying Your Short, Medium, Long-Term Goals

The first step in financial planning is to identify your goals.You have to estimate how much money you'll need to meet each of your goals, and use an online calculator to determine how much you need to save each month to reach that goal within your time frame.

Your short-term goals should take less than 5 years to achieve might include a wedding, going on a vacation,owning a new car,etc.Next, think about medium-term goals, such as owning your very first home and financing your kids' educations.Last but not least, list your long-term goals, such as travel and retirement.

How to Determine How Much You Need to Retire???

The most commonly asked retirement question is "How much money do I need to retire?". Although a little simplified, the fastest way to get an estimate is to multiply your first year of retirement needs by 25. In effect, this assumes that you are withdrawing 4% of your total retirement savings per year. For example, if you are planning to retire in 5 years and expect to need $40,000 per year, you would want to have about a million dollars in your retirement account.

Don't forget to factor in other sources of income. Subtract the amount of social security income and pension income from your annual needs. Also, if you are planning for a retirement that is more than a few years away, make sure you account for inflation by adjusting your annual needs upward.

Some other important things to remember are that health care expenses are increasing faster than income and savings rates. Also, don't forget about any children or parents that you may have to provide for, whether it's education, housing or elder care. And remember, you may need a home too someday that could cost more per month than your current living expenses. It's always best to aim for closer to 50 times your first year's retirement needs.

Achieving your financial goals means making a realistic plan to get there and sticking to it.When you had reached your goal and owning your dream home or taking a great vacation, you will be so happy and glad that you took time to set your goals and make a plan to achieve them.

In conclusion,no matter what your goal, planning for your retirement is one of the most important things you can do to make sure that your dreams come true.