Becoming rich can be daunting and confusing at the beginning just like navigating in a foggy sea. But once you start taking some steps, things get clear.
If we define what financial planning is, it means a long term process of wisely managing your finances so you can achieve your goals and dreams. Retirement is one of the areas of financial planning and it is a process too that takes time and effort to build successfully. Although it is a long term endeavor, whatever steps you do today will surely help you secure a leisurely retirement that will help you maintain the lifestyle you choose in the future.
To ensure a graceful retirement, here are some steps that you can take in making this goal a reality:
- Determine your future retirement needs. If you are going to retire now, ask yourself how much monthly budget you will be needing. To know the future value of your retirement need, use the help of some financial calculator applications that you can download on your phone. But for more accurate assessment try to seek the help of a trusted financial planner. After determining your need, make sure to create a plan and put it in writing.
- Implement your plan. No matter how good you are in mathematics, you cannot beat the person who doesn’t have much understanding of the intricate details of planning but is making sure that monthly he is setting aside for his golden years. Plan implementation is by far the most important part of ensuring that you will have enough resources when you get old. Moreover, it does not consist only of investing monthly but as well as making sure you are managing your current expenses, eliminating bad debt, and taking full potential of your income capability.
- Monitor every action you make. You can start feeling the success of your retirement plan even if you don’t have your desired fund yet. You can feel the joy of the journey the moment you hit the first step but the real success of your goal will only happen if you continuously engage yourself and commit to the process. Track your progress and for sure every time you see that you are on tract you can feel a sense of accomplishment. But keep in mind that retirement planning is a dynamic process, don’t hesitate to adjust the plan whenever necessary. Make a quarterly and annual review. If necessary, adjust your plan to your current financial situation such as lost of job, having a baby, or sometimes death of a spouse.
- Get proper protection. Financial planning evolves around two financial concerns: living too long or dying too soon. In both of these needs you need to have proper protection. Make sure you have adequate life insurance protection coverage. At the onset of building your retirement fund, insurance will protect the remaining spouse if one of them dies prematurely especially if the one who was taken away first is the bread winner. But once you’re able to hit your needed retirement fund, insurance will help your spouse and your loved ones save from the problem of estate tax.
- Consider health care cost in your retirement plan. You will not reach your life’s dream of having graceful retirement if you forget to include in the equation your future budget for health care. It’s not only about the future cost of angioplasty that you must be concerned of but also the future cost of your vitamins and maintenance medicine. These medical expenses will surely shake the stability of your retirement fund.