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Plan for your retirement
Retirement financial planning, retirement planning programs, retirement mutual funds
Most of us, when we are in twenties, we love invest on a house, a car, travel
and other entertainment. Retirement plans and savings are the least when
we are young. We want to live the life to its fullest. Hence, do not wait
till the last moment of your retirement. The researches say that 7 out of
10 Americans in their thirties have not yet started to save up for their
golden years.
Start it now. The initial thought that comes across to our mind is how much
should I need for my retired life. You can count on the following 3 factors
for saving
• The exact age of retirement
• Span of life
• Annual funds you need to spend
The age of retirement
Majority of the population wish to retire at the age of 55, but in reality
it extends to 65 years. Hence, as an average, 60 years can be considered
as the age of retirement. Imagine if you are in your 30, then you have got
30 more years left to save up for your retirement life. Keep saving the
amount in banks or insurance or in land or real-estate, or shares. The source
can be anything as you prefer. But by 60 you have to get the assumed amount
of retirement. Suppose if you have not, you can continue to work for 5 more
years to reach the golden spot.
Estimation of your life-span
The number of years you wish to live after your retirement is probably proportional
to the money you are going to save. Do not be fictitious of 100 years, 110
years and 2 years, as you do not need save for 2 additional years after
retirement.
Hence, be practical and make estimation for 90 years. Underestimation of
the life span would make your bank account nil when you need the most. When
it is 90, that is 30 years after retirement, your cash reserve (cash account,
treasury bills, bonds, stocks, mutual funds etc.) should be for 30 years
and large enough to last for the whole span of life.
Annual funds
You need to make a bit of calculation to bring out the estimation. You need
to estimate the amount which will maintain the same comfortable standard
of living that you enjoy now. The usual expenses at the age of 60-90 would
be higher in medical expenses, prescribed medicines, insurance, rent, travel,
utilities, groceries, fuel, electricity, gifts for the grandchildren, and
other unexpected expenses.
If your earnings come up to $20,000 in a year, at an inflation rate of 2%
per year, you definitely need $36,000 per year to live with the same purchasing
power as today. And roughly, it is around $500,000. So divide the amount,
along with the available interest rates and start saving.
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