It is the process of identifying your needs and wants, relating those goals to your present financial situation, and seeing what adjustments may need to be made now to obtain those goals in the future. Realistic strategies are developed, acted upon, and your progress is monitored to make sure that you stay on course.
It is often thought that retirement planning is only for the “wealthy”, and is somehow a stressful procedure, second only to sitting in the dental chair. In reality, good retirement planning is most helpful to middle and upper income individuals, because the truly wealthy do not have the same level of concerns that can be addressed by the planning process. Retirement planning may reduce stress, because at the end of the process, you are relieved to know that your current plan is designed to get you to where you want to go financially.
Developing a sound retirement plan may help you to:
- Identify appropriate standards of living in retirement.
- Understand employer and government benefits you may receive, and how they coordinate
- with your own savings to produce a livable income.
- Achieve an appropriate mix of investments to work toward your long-term financial goals.
- Do what is possible to reduce estate taxes.
- Re-direct your work goals and energy towards new careers, part-time work, self-employment, volunteer opportunities, leisure pursuits, or any combination of these activities.
These are a few of the potential benefits of retirement planning!