Do I Need a Retirement Plan?
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Planning for retirement typically entails deciding what you want your standard of living to look like after retirement, and determining what combination of financial savings and asset management will get you there. Consider that most people reach a point in their life when they are no longer able to or no longer desire to work, everyone can benefit from making a retirement plan. It’s never too early to start planning, so whether you are just entering the workforce or you have been working for some time, now is the time to begin making plans for your retirement.
Some companies offer resources for their employees to take advantage of in regards to retirement planning. IRAs and 401(k)s are probably the most commonly discussed examples of retirement plans, but are by no means the only ways for a person to prepare. If you are unsure what kind, if any, of retirement programs your employer offers, contact your Human Resources (HR) Department. The various funds and retirement plans available for people to utilize are endless, and depending on your goals for your future, one might be preferable to another. This is why it’s a good idea to speak with a financial advisor or elder law attorney regarding your retirement plan. It’s never too early to give yourself the best shot at creating the future you want for yourself.
Things to Consider When Creating a Retirement Plan:
There are many aspects that go into retirement planning. Just as making plans for next month or next year requires predicting future financial status and other life events which might occur, retirement planning requires this on a grander scale. Instead of predicting what kind of money and benefits you will require in the short term, you must consider what kind of income and benefits are necessary to live the life you desire after retirement long-term.
Let’s go over some important things to consider when creating a retirement plan:
- Timeline: At what age or after what milestone would you ideally like to retire?
- Future sources of income: Will you receive any benefits later in life, such as VA benefits, pension, etc.? Do you currently have investments or assets you wish to free yourself of for financial gain after retirement?
- Estimated future expenses: Do you currently have any medical conditions which could worsen or require additional medical care? Do you intend to move into an assisted living facility or hire in-home help in the future? How much would you like to spend a month on things such as rent/mortgage, insurance, food, gas, savings, extras, etc.
- Savings: How much would you like to continue saving after retirement? Do you intend to put money back to benefit dependents or family members?
- Assets: Do you have current investments or possessions which could be worth more in the future, or that you would like to sell in order to add to your retirement fund? What assets would you like to retain?
- Life insurance: What kind of life insurance do you want to have? Who do you want it to benefit? How much will it cost?
- Estate planning: How do you want your assets distributed after you pass away? Are there certain properties or savings you would like distributed to specific individuals, or is there somewhere you would like your property donated after death?
Retirement Plans Are Not Set in Stone.
It’s important to note that your needs may change over time. You might realize you can retire earlier than originally expected, or perhaps due to life changes, you will need to retire later. Maybe your priorities will change in regards to what elements are important for you to have in life after retirement or you will be offered the opportunity to change your retirement plan to another program.
Retirement plans are fluid. At one point in life, you might be able to put more money back toward retirement than other times. This is perfectly normal and to be expected. Having a financial advisor on your side to help reassess your current and future needs can ensure that your retirement plan remains as effective as possible at ensuring the future you want to see for yourself and your family.
To learn more about available retirement plans or to discuss your situation with a financial advisor, reach out to a reputable retirement planner ready to answer your questions.