Retirement-income-planning should be an ongoing process beginning well before we leave our full-time career position. That planning effort should anticipate and provide for our financial needs throughout our retired life. That is a tall order considering the uncertainty of our economy and that we are attempting to project our needs from 20 to 40 years beyond our retirement date.
I am hopeful that our healthy and involved lifestyle will result in a post career lifetime a lot closer to 40 years than to 20. Now we have to find a way to fund those golden years.
Have you already left your career position or are you nearing that time? If you are 62 or older, social security will be a bigger factor for you than it will be for those a few years younger than you. In any case, social security alone will not fund a comfortable retirement lifestyle. Other income sources will need to be developed.
Income planning should start with an assessment of your current financial status and what your financial needs are at that moment in time. This will be used to refine a projection of financial needs into the future and to prepare your retirement budget.
If you have not discussed your retirement budget with a financial consultant, you need to do so as early in the process as possible. While it is your plan and your responsibility, it would be prudent for you to consult with a knowledgeable fee for service professional financial planner to give you a heads up on where the land mines are located.
Financial planners are trained professionals who are active in their profession through associations and networks. Their job is to stay abreast of changes in government programs, the market and the economy. They should be considered as an indispensable part of your retirement planning team. I believe it to be prudent to confirm professional advice with your own research. There are a lot of good resources on-line such as the National Association of Personal Financial Advisors.
I have read that we will need minimum of 75% of our career income during our retirement to maintain our lifestyle. The amount that will be needed in retirement depends on your unique situation and the decisions that are made regarding lifestyle choices. Everyone is different and your personal cash needs should not be based on an arbitrary number but on your real assessment.
A review of your insurance coverage should be a part of your planning. Do you have enough health and life insurance? If you plan to retire prior to 65 years of age health coverage may be an issue. Best to find out before retiring. You will need a risk assessment on your home, care, etc. This is where the services of a qualified professional should be used.
You have line item veto power. Be realistic about your post-employment needs and set goals. Social security income is the floor. Add income layers as necessary to meet projected expenses. Diversity of income sources is always good but it is essential in our current economic environment. If there is still a mortgage on your home, you should consider paying it off as soon as possible to cut down on retirement expenses. Prepare to avoid surprises and look for other ways to cut expenses.
Sources of added income layers could include post career employment of some kind. You could consider a retirement job to help fund a comfortable retirement lifestyle. If you have a passion for helping others, sharing healthy Zilis products is a great work at home business. For more information on how complete the form at the bottom of this page.
You could also consider retirement annuities, a retirement-business, and/or a reverse mortgage. Depending on your circumstances and needs, you may want to consider a franchise opportunity in starting your new business. These options should be discussed with your financial consultant.
The income section of your retirement-income-planning budget should include a line item for continued saving for future investment and contingencies. Saving and reinvesting part of the income from a post retirement job or a home business could help offset erosion by inflation and increase your average retirement income.
Rising medical costs, loss of value in real estate, and the business downturn since the summer of 2008 have demonstrated that detailed reviews and adjustment of our retirement budgets are necessary at least annually just to stay even.
No one can predict the future of Social Security or for that matter the financial stability of the United States or the World economy. During these uncertain times it is advisable for us to stay informed through consultation with our consultants, reading financial and trade journals, and listening to news reports.
Retirement-income-planning can be compared to driving your automobile in traffic. An abrupt change in lane or speed can be disastrous. We need to stay alert, anticipate changes and make judicious adjustments based on sound advice and personal research.
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