September 4, 2021 0 Comments Finance

How to Start Retirement Planning by Ken Julian

You know the feeling…that gnawing sensation in the back of your mind that your retirement plan isn’t ready. You keep moving the goalposts, and your retirement plan keeps coming up short.

You know that feeling I’m talking about? The one where you want to throw in the towel and declare, “I’ll retire when I’m dead.” We’ve all been there before…

We’re talking to the working professionals who don’t know how to start retirement planning. We’re also talking to the homeowners who don’t have an emergency cash fund in place, and we’re speaking to the parents who want to save for their kids’ education but can never seem to find that extra money when it comes time.

How do you turn “I’ll retire when I’m dead” into “I’m ready for retirement?” Here are some key concepts to understand and steps you must take to start an effective retirement plan

Understand the nature of retirement planning

It is about creating a financial plan for you to retire on time and stay retired indefinitely. First, you need to decide how much money will be enough for you in your retirement years. The amount should be carefully calculated, keeping your expenses like medical, living, etc., in mind. Once the amount is decided, one can proceed to the next stage of retirement planning.

You need to understand that there’s no perfect number for everyone, and it depends upon you as an individual. Your number may be very different from your colleagues just because their expenditure priorities might have been different from yours. So know yourself and calculate your retirement number.

We reached out to Ken Julian of Washington Wealth Management for advice for those who have not yet started their retirement plan. “It’s never too early to start,” he said. “You can get an idea of retirement by putting together a cash flow analysis. Try and figure out how much income your investments will generate, what you’ll need for recurring monthly expenses, and if you have other non-recurring expenses like Christmas presents.”

Plan for your retirement once you have got the final number

Start putting money aside regularly for your retirement fund or an annuity of your desired amount so that you can stay retired without any worries. The ideal way is to invest the money to generate income on which you can live, instead of converting them into instruments to make more money out of.

Many people use their IRAs to invest in gold, silver, or other precious metals and commodities, etc., to get a better return on investment compared to putting the money into accounts that only give them fixed income returns. However, be cautious about these investments because they don’t have any safety nets other than the stock market.

Investment options for retirement planning

One of the best ways to invest your money prudently is by investing it in a mutual fund. Professionals manage mutual funds, and they invest your hard-earned cash into different stocks, bonds, real estate, etc. It makes sense because you get the advantage of diversification and professional management. You can also invest in annuities because the money you invest in them is guaranteed to give you a fixed income.

Final Thoughts on Starting Your Retirement Plan

Bottom line, the best way to start your retirement plan is first to understand the nature of a retirement plan, then start putting aside money regularly for it. If you practice discipline and consistency in this, you’ll not only reach your target retirement number in time but also increase the odds of staying happy during your golden years.