Retirement planning is the type of planning one does to be prepared for life once paid work ends. This includes not just financial conditions but all aspects of life, such as lifestyle choices given the newly acquired free time, where to live, and when to completely quit working. On the financial side, it means identifying sources of income, estimating expenses, managing assets, as well as implementing a savings program.
Government-sponsored retirement via Social Security and pension benefits, for instance, is facing issues that include an aging world population and fewer working-age individuals contributing to Social Security systems. Private pension plans aren’t immune to problems, too, with the real possibility of corporate collapses that can lead to employer-sponsored stock holdings getting wiped out.
Those who are planning to retire soon should have a checklist of things to do. This includes knowing when one can realistically retire, learning how medical care can affect one’s expenses, studying how Social Security timing will affect one’s income, making a plan for debt payment and management, and keeping one’s financial and lifestyle plans on track.
Thus there’s a need for effective retirement planning, whether in young adulthood (ages 21 to 35), early midlife (36 to 50), or later midlife (50 to 60). One needs to pay attention to one’s home and existing home equity loan; estate plan or what happens to one’s assets after death; tax efficiency, where most of retirement accounts are taxed as ordinary income tax; and insurance such as navigating the Medicare system.
As life tends to throw a curveball from time to time, it’s important to be flexible when dealing with changes, such as grappling with unforeseen illnesses.
Barry Bulakites is the president of Table Bay Financial Network and is a recognized innovator in the field of financial services. For similar topics, subscribe to this blog.
