Adapting to future needs.

Planning For Retirement – What You Can Do Now to Ensure Your Retirement Plan

Planning For Retirement

Planning for retirement is perhaps the single most important step you must take to secure a financially secure future for your family. Four steps to Retirement Planning in U.K start by tracking your fixed and variable income, several years ahead of when you anticipate retiring. This will help you accurately predict your future income and debt load. Start by keeping a running tab on your income from all sources including employment, government benefits, investments, bonuses/salary, bank interest and rents. Mortgage interest is also a consideration. You should also keep track of what you have saved for the purpose and invest that capital into an emergency fund or some other high value asset.

Next, calculate your total lifetime income based on the age you have estimated when you will retire and the life expectancy of your chosen retirement date. Using these numbers, subtract your current expenses from your expected income and divide by the number of years remaining to plan for your retirement expenses. The result is your lifetime retirement income.

You should also plan for medical expenses. In this phase of planning for retirement, you want to make sure that you have enough money to provide for medical expenses in the event of a serious accident, major illness or injury or if you become seriously ill or injured and cannot work. To calculate your medical expenses, divide your annual income by the number of years remaining to fund your retirement account. Your medical expenses will include: Medicare, provincial and territorial health, dental, personal accident, disability income, theft, and insurance premiums.

What You Can Do Now to Ensure Your Retirement Plan

You should also include: life insurance and annuities, since they tend to be tax-exempt when withdrawn. If you are not yet retired, you may also need to purchase supplemental insurance coverage such as: life insurance, savings bonds, guaranteed annuity income, disability income, accident benefits, savings, vision insurance and critical illness coverage. If you are already retired and are facing financial difficulties, you may need to adjust the amounts included in your retirement plans. For instance, if you took out a 30-year mortgage, adjusted your loan term to two years from now and increased your payments to five percent from now, you may need to increase those amounts.

Once you have done all of this, you can move on to expenses outside of the pension and social security plans. One important area of investment outside of the pension and social security systems is real estate. “Retired persons with life policies should consider both personal and business property,” says Fernandez. Life policies often pay out a cash value while business properties often pay out a retained value which is less than the market value. Life policies typically have lower fees and higher rates of return than other investments and real estate usually provides the best return.

With expenses taken care of, the next step is to consider what you are going to do with your money after you retire. Some retirees choose to save money for their spouse and children’s education or to set aside money for a rainy day. Others decide to take a loan from either a bank or a retirement plan provider and invest it in the stock market. Regardless of what you do, it is important to set aside a conservative amount for any unexpected expenses that may occur during your retirement. “Your goal is to have money left over for all of the things that you want and need, but also to have money saved for anything that may come up in a year,” says Fernandez. And with proper planning for retirement you can have that money in place before you reach retirement age.

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