One Favored Life

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Category: Money

Planning For Your Retirement (So You Can Travel More!)

Financial security in retirement doesn’t just happen. It takes planning and commitment and, yes, money. And if you want to be able to do lot of travel in your retirement, then the planning starts now!

Every time the word retirement pops up, everyone instantly thinks of finances. Yes, financial security is everything for anyone thinking retirement or headed there. Most people nowadays do not wait till they reach the age limit for retirement, the number of those taking early retirement is constantly increasing. As a result it is very important to note what you need to take into consideration when planning for your retirement. Below are some facts about retirement:

• More than half of people do not plan for their retirement in advance
• Most Americans spend twenty years in retirement on average

1. Start saving, keep saving, and stick to your goals
Saving is very rewarding so whether you are doing it to secure your retirement years financially or it is simply for investments, never stop saving. You can always start with small amounts and then keep increasing with time. If you begin saving early enough, you will be able to accumulate more money. As you make plans for your savings always have retirement as a priority. Make plans and abide by those plans to the latter.

2. Know your retirement needs
Retirement can be quite expensive contrary to what most people think to what most people think. The way to a financially secure retirement is to plan ahead otherwise, you will face financial challenges that will force you to lower your living standards. A retirement calculator can help you plan.

3. Contribute to your employer’s retirement savings plan
Sign up to retirement plans provided by your employer, contribute as much as you can towards it. Since deductions are automated, you will always be forced to contribute without failing.

4. Learn about your employer’s pension plan
Confirm whether an existing pension plan provided by your employer covers you. You can request for an individual benefit statement to check whether the benefits are worth. You also consider what happens to your pension savings when you switch jobs. Also check whether you are part of your spouse’s benefits.

5. Consider basic investment principles
You savings style will directly determine how much you save. Be aware that economic challenges such as inflation may affect your savings. You should also note how your savings are invested and your investment options. You can invest into several different investments, this way you will be able to cut the risks and boost returns you are entitled to. Knowledge on management of funds is directly related to financial security.

6. Don’t touch your retirement savings
Never withdraw your retirement savings. This would have a considerable effect on your principal amount and you would not want that. If you have to switch from one job to another, let leave your savings in your current account.

9. Find out about your Social Security benefits
Calculate how much you are entitled to from your social security benefits. You can use the retirement estimator to calculate. In many cases it is normally about forty percent of what you were earning before your retirement.

Financial Security Requires You to Have a Proper Strategy in Place

20/365- "It does not boast, it is not proud..."
There was a time when people believed that if they had land, they were financially secure. They could farm the land, grow food on it, be landlords or find other uses for it. But poor weather, crop diseases, and economic downturns quite often left property owners unable to even pay taxes.

It was also earlier thought that if you had a good job with a large company or the government you had financial security, from the steady income that these jobs offered. But economic downturns, job cuts and competing business led to this becoming just another myth. Governments have tried to create safety nets like Social Security, that does give a modicum of financial freedom, but even these are rarely more than at a subsistence level. What then does a person need to do to have financial security?

The best strategy to achieve any form of freedom from financial worries is to minimize risk and always ensure that you have a number of income avenues. You achieve some financial security if you are able to ensure that your sources of avenue are reasonably safe and give you reasonable returns. This process can be assisted if you are constantly weighing the three important aspects that make for financial security. These are:

• Assets
• Income
• Expenditure

Assets form the base for your financial strength, and must be as far as possible without any encumbrances. A mortgaged home will not fall completely within this, though valuables and jewelry will. Money in the form of investments is also subjected to risk and does not give complete protection. The degree of risk will however vary from Certificates of Deposits, mutual funds, share and stocks, commodities or any other avenue.

Income has to be steady and something that you can rely on, if you have to have the required security. This is rarely completely under your control and there always external factors that can make a difference, like job losses, reduction in interest rates, stock market variations and a general economic downturn.

Expenditure is the one area that can always be under your control and play a vital role in ensuring financial security. Learn to live minimally and you will be far more secure than all your friends and acquaintances and probably much happier as well. Save as much as you can, and do this systematically, by taking advantage of every possible avenue, so that your future is looked after. The ultimate aim, of any financial security strategy that you follow, is to ensure that you have no worries for living comfortably, even when your career is over.

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