3 Stages of Retirement Planning – Successful Retirement Guide
Retirement period everyone wishes but when actually a person retires, he confused about next beginning. It demands a pre- planning before retirement. Retirement is not one fold but covers a huge planning. It should be perfect and there are many factors that are playing important role.
It is not possible to predict accurately about market returns, inflation, social security and Medicare. This is first reason. Second is, we do not know our personal circumstances after decades. But these difficulties should interrupt in future planning. Instead of that, one should try to get best result from planning. For planning, there are three stages say, Early Birds, Mid-lifers and Near Retirees. Let us discuss in detail.
Early Birds are those who are just starting to plan out and it is easiest situation. Do not worry about goal reaching or evaluation because there is enough time to create a future. Market returns, future inflation and expenses in retirement should be planned out 40 years or more into the future is of limited value. One thing should keep in mind that it is nearly impossible to make exact prediction about your future.
Absolute opposite of above situation, one is certain about his present earning. The rule of 10-15-20 is easiest way for saving. According to a famous writer for retirement, saving 10 percent of gross income is the minimum, saving 15 percent is the sweet spot and saving 20 percent is a home run.
People between age 30 years to 50 are covered in this category. It contains few added dimensions. It may difficult to assume still because of decades are remaining for retirement. But Mid- lifers get more information than early birds.
As per one suggestion, when one is not following financial rule of thumb uncritically, he should plan to save 12 times annual income by his retirement. To reach at this goal by age 35, one should save 1.4 times their annual salary, 2.4 times by age 40, 3.7 times by age 45 and 5.2 times by age 50.
People who have nearly 10 years left in retiring are in this category. This categorized people should focus more on actual expenses in retirement. They should prepare themselves by actual necessary information that needed at the time of retirement. They have a clear picture of their Social Security and Medicare benefits. Though retirement is not exact science, information available to us can be put in better way.
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