To ensure a safe retirement people need to assume a more conservative posture towards the future. There is a need to pick your investments so that you can achieve an average return rate that is financially comfortable considering your expectation for the future. People naturally want to follow their dreams and personal goals, and in many times, only find the time and dedication for this pursuit after retirement.
Learn how to establish a savings plan, in eight reasonable and simple steps that are easy to manage and will allow you to build that retirement savings account without living a life devoid of fun.
- Find the GAP. The first step for a retirement plan is to define how long will you be retired. That is a moment for true reflection that needs to be taken patiently. Ask yourself how many years you plan to keep working and define a clear age where you will start your retirement.
This is a time to face the fact that no one lives forever and you'll have a limited amount of time to pursue happiness. It is perfectly healthy to assume a long life expectancy. In fact, by a conservative point of view, that will increase the financial amount needed for your savings plan and will ensure that most of the best opportunities for medical care and quality of life will be financially available to you in the future. Having some faith in your future will certainly increase your life expectancy.
- Picture your budget. Talk to retired people near your. Ask about their family budget. Find out how much is spent in medical care and other expenses. Keep in mind the important things:
- Your family history when it comes to health problems.
- Your plans and dreams for the future.
- Those spoiling gifts to your grandchild.
- Your influence in the life of people around you and theirs in yours.
Come up with a general idea of the monthly expenditure you'll have. Try not to focus only on the negative possibilities for the future! Include other activities such as travels, lectures and courses, group/family activities and, mostly, those dreams that got left behind somewhere along the years.
- Play it safe, but play it cool. By the end of your projections, add it all up and see how much it will cost to be retired. Add something between three to seven percent to that total.
Although it's not possible to predict every event in the future, we can use a little margin for inefficiency in our budget so that we are comfortable with unforeseen circumstances. Our goal here is to cover all the main priority needs and for that we need to play it safe on our projections.
Try not to lose focus and be too safe. If your projection turns out to be greatly uneven with your actual budget, you might want to rethink your premises and review your assumptions. This is a long step and should be considered seriously. Don't worry if you have to redo it several times; after all here is where you set the things that you will and won't do in your future.
Google those alternatives. Research your investing alternatives. Find the ones that can generate at least 80% of the amount you'll need in you retirement plan from here until your starting age. Make sure you balance the volume invested with the risk implied in the investment.
Try to diversify your investment in a way most of it is based on a savings account or risk-free assets. Leave some in other kinds of investments to add that spicy flavor to you patrimony. Rethink your investment position every time you feel uncomfortable with your setup.
The remaining 20% of your budget will be generated during your retirement days by the continuous valorizations of your remaining assets. They can also be complemented with alternative sources of income that will be cited next in steps five and six.
Don't compromise the now to save everything for later. If the amount needed monthly to reach your savings for retirement is far too great and will compromise your family budget now, you need to reevaluate steps one to four.
Try retiring a little later, or focusing on less material objectives. Consider the possibility to generate alternative income to your budget. I bet your grandchildren won't be upset with more emotional and less expensive presents, if that will keep their grandparents closer on the holidays.
- Don't plan on being a couch potato. It is well know that mentally active people have a greater life expectancy and are more lucid in their old ages. Think about ways to add value to your retirement and start taking actions now.
It is reasonable to imagine older people in consulting jobs and performing secondary tasks in management. Show the people around you that experience is something to be admired. Still, with the advance of the internet there is the creation of a larger informal job market on online sales and support. Find a reasonable way to add some figures in that savings account so you can enjoy more of your retirement. Aim for a job you'd love doing and follow that dream.
"No man is an island, entire of itself". Keep in sight that you shouldn't expend your retirement alone. If you have a partner, you should plan retirement together and be able to lean on each other whenever it's needed.
If you are alone, it's time to get out there and find others like you. Partnership is something to be admired and sought in your older days. Devote yourself to your dreams and family.
Trust me on this. It is a lot easier to be happy when you are around people who love you and take care of you when needed.
Take action. With all planning you need to be alert of undesirable effects of unforeseen factors that are out of our control. Be ready to act as demanded in order to change your plan as the contingencies appear. It is natural for us to have, along our lives, good and bad years. Try to safe more in those good years so that there's less pressure over the "not so good" years.
It's our lives that we are talking about. We must take responsibility for it and, in case something goes wrong, reevaluate our priorities, redefine our goals and always strive for a better future.