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Retirement Planning
Financial Planning For Retirement: Don't Be Without It!Tip! Another retirement planning variant that I consider to be rather suitable for myself is the Registered Retirement Savings Plan used in Canada. The conditions of this plan are similar to IRA but it offers several advantages compared to IRA, the major of them being: the possibility to receive a tax protection on the profits gained within the RRPS account, the opportunity of making the contributions less with each year of investing into this retirement plan (because of tax deduction on the invested sum) and finally the possibility to use progressive tax system when investing together with husband or wife (this variant is also regarded by some variants of IRA).
Going into retirement without having done any form of financial planning is to be compared with walking the high-wire without a net! Everything is fine whilst the going is good, but come the first glitch or setback and disaster is just around the corner. I don't mean to be the bearer of bad news here, but the sooner you realize that something needs to be done about the situation, the easier it will be to get something started. You need to sit down today and take a look into the future, try and imagine what sort of lifestyle you will want to be living in your retirement. Do you imagine you will just be able to carry on with your present day to day life? If so, you are going to need some method of producing the same income as you are earning now, BUT WITHOUT WORKING! sorry to shout but I thought you needed to be woken from your daydream!
Do you have savings that are predicted to be earning interest equivalent to your present earnings? if so, take a pat on the back, but just to be sure, I would check again. The words "predicted earnings" and "future forecast" together with high percentage figures, are terms that are freely hinted upon by policy salesmen at the time of signing, but somehow avoided nearer to the time of payment! Did you take immediate advantage of the kind offer of joining the company retirement plan? with the even better offer of employer matching contributions? OUCH! why ever not? they were offering you free money, even better, tax free money with the best invention since sliced bread; namely, compound interest thrown in, (I think Albert Einstein phrased it differently, but you get the idea) if you still have the chance, jump in with both feet before it's too late. Surveys have shown that up to 75% of people are barely earning enough to cover their bills, therefore have no means of saving to provide an income for their retirement. These people are going to be reliant upon social security in retirement. Do you think there will be enough to go round? I wouldn't bet on it!
It is important to bite the bullet and take stock now. Find yourself a good financial planner, these people are there to help.
Start clearing your debts, pay off the small loans etc. first whilst maintaining minimum payments on the bigger loans, the smaller loans get paid off quicker and you can then take the money you where paying on the small paid off loans, and add it to the monthly, bigger loan payments. You will get a sense of achievement when the small loans are out of the way and be encouraged to see the bigger loans being reduced in a shorter period of time.
Needless to say, when the loans are paid off, continue to pay
the amount you were paying on the loans into some form of
savings investment fund, hey! you got by without
Tip! When considering a financial retirement planning, it is best to consider yourself working part-time even after retirement. What you will earn on your part-time job will help increase what you've saved for your retirement. |
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