The responsibility of planning for our retirement
and well-being in the future falls on us more and more. Trusting that the
public pension system is capable of covering our needs as we would like is
becoming increasingly complex and uncertain. The reality is that if we want to
have some security , we would do well to take action on the matter and not
trust that the problem will be solved.
Nobody likes having to worry about the future. But
fortunately, facing the issue and planning does not have to be so traumatic .
In fact, knowing our economic situation well is less stressful (even if it is
not as good as we would like) than avoiding thinking about it. Also, if we are
aware of the reality, we will be better equipped and we will be able to find
the tools to improve it. Maintaining a proper perspective , with clear and
well-defined objectives, helps to reach a successful conclusion. A few simple
steps lead to big future profits:
1. Visualize
your retirement
Carrying out a plan adjusted to the needs of retirement
is something very personal, since each case is different. To be aware of what
we will need in our retirement, it is important to visualize how we want it to
be. Where will we live? What additional needs will we have? It is important to
take some time to clearly identify, together with our loved ones, what things
will be the most important .
2. Think
long retirement
Life expectancy in the world is increasing. In United
State we enjoy one of the highest longevity rates in the developed world.
Science and medicine are continually advancing, providing more and more
longevity and quality of life. Thus, upon reaching retirement at age 65, it is
perfectly plausible to have a life expectancy of between 20 and 30 more years .
The retirement period can be long, and nobody wants to find themselves in need
at a very old age.
3. Analyze expenses
During our work stage we find ourselves with all
kinds of unexpected expenses. Vehicle repairs, orthodontics for children, home
renovations… As retirement age approaches, we will no longer need to incur many
of them. But this does not mean that we will not have expenses. They will be
other types of expenses . It is important to be aware of what expenses we will
have to face when we reach retirement, including taxes, medical costs,
inflation, etc.
4. Identify
sources of income
Most workers contribute throughout their working
life, and finally receive a pension from the State, when they retire. Good
planning will allow this not to be the only source of income : we will be able
to have pension plans , with significant tax advantages, or accumulate
financial assets that generate income for us.
There are many financial assets on the market.
Fixed income can provide us with a regular and constant payment, although we
run more risk that inflation subtracts purchasing power over time. Variable
income can offer us higher returns , but we will have to withstand greater
volatility over time. Each source of possible income has its characteristics,
its advantages and disadvantages . Good planning is the key to obtaining stable
and recurring income.
5. Prepare
an investment strategy
There are two stages to retirement planning:
accumulation and distribution . They are very different phases and have to be
managed differently:
During the accumulation phase we must be more
ambitious, enduring a little more volatility in exchange for higher returns.
Time plays in our favor. However, as we approach retirement age we want to be
more cautious, because a strong market correction can cause our portfolio to
significantly decrease in value, and we may need the money at that time. In any
case, if we have accumulated more assets, it will be advisable to adjust our
risk and return expectations .
6. Face
fears
In life we encounter many adverse circumstances
and challenges. One of the most disturbing aspects that we have to deal with is
the uncertainty of the future . Taking a long - term view of our situation and
having reasonable expectations are the foundation for properly preparing for retirement
plan by John
Labunski .
Making an inventory of our situation in a realistic
way is essential to be able to implement an appropriate strategy for our
circumstances. Only in this way will we achieve more peace of mind to enjoy the
retirement that we have always wanted with our loved ones.
Posted by: John
Labunski Dallas
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