5 steps to have successful retirement plan

Even if it’s a long way, planning for retirement is a great idea. Below five steps can help you create your successful retirement plan.

Many people wait until it’s almost too late but It’s never too early to start planning for retirement. As per data, 54% of people didn’t even begin creating a retirement plan until they were in their 50s, whereas almost 40% of adults start putting money aside for retirement in their 20s.

These five steps can help you towards your retirement goal.

1. Set a goal for your retirement

If you have dollar number, that’s great but its ok if you not have exact dollar number.

Ask yourself, How Much income you want to live like you are living as of today and you are not working?

If you have not thought before or calculated before you can calculate your current income and add inflation in it. There are many online tools available for the same. You can also take financial professional help also to come up with this number.

it uses your current age, income, retirement contribution, savings, investments, and estimated social security.

2. Start saving early and for longer

The earlier you start the better. Do not wait until its too late. No matter how much you set aside. Each dollar matters. Start early to have peaceful life later. The sooner you start the longer you will invest for retirement. That will generate compounding return which will help you in longer run.

For an example: You start saving in your mid-20s for just 15 years, or you start saving at age 35 and stash money away for 30 years. You’d have more in the latter scenario than the former, right? interestingly thats not true.

3. Social Security alone is not your retirement plan

Social Security is never supposed to be as a full income replacement program. It is to replace just a portion of your pre-retirement income along with your other retirement savings.

Social Security amount to your retirement planning depends on your lifetime earnings. It also depends the age at which you claim benefits. Future Social security benefits largely depends on future benefit levels and legislative support, to name just two factors. Also one should consider Inflation and long term care cost while retirement and if you live longer.

You can track your forecasted potential benefits by creating an online Social Security account.

4. Make up for lost ground

Financial goals change from year to year because of multiple factors and ever changing life events. because of any challenges if you could not save enough, there are ways you can boost your savings. It is never late:

  • Increase your contribution in 401k or 403b – workplace-sponsored retirement plan . An extra 1% a year can change a lot in long term. If you have not opted this yet, start it. at least invest as much as your employer is matching.
  • Start Individual retirement account (IRA) or Roth IRA to save in addition to any workplace plans if income and contribution limits allow. Consider Spousal IRA or SEP IRA.
  • Make catch-up contributions to your 401(k) (if your plan allows) or IRA if you’re 50 or older.
  • Pay off your debt, then fund in retirement savings.
  • Delay your retirement date, even by a year or two make a huge difference.
  • Start Index Universal Life having living benefits: This is life insurance linked accumulation plan gives you tax advantage money while you are retired, you do not get negative impact of market and have potential to grow money over the period of time safely without market downturn risk. Many providers cover living benefits means you get money while you need it and while you are living in conditions such as Major heart attack, cancer, comma, paralysis, severe burn, blood cancer, chronic illness or terminal illness. I will give more detail on this in my another blog.

5. Review your retirement plan at least once a year

Make habit of tracking your goals and your achievements – checking your retirement plan savings. Are you on the track? and do adjustments as and when required.

If this helps you, please consider to share with others. Knowledge is power and applied knowledge is beneficial.

Leave a Comment

error: Content is protected !!