Planning for retirement is important because having enough money to lead a comfortable life in the sunset years is a dream for all. But do to the global economic turmoil will it still just be a dream?
Let’s take a look at what will affect retirement income.
How much would have been saved in your retirement account? What will be the average earnings of the fund unto the point of retirement. Have the tax implications been considered. What is the best way to invest your fund to get the highest returns.
If you have been saving diligently in a life insurance plan then this would have built up to quite a lump sum by retirement. So make sure that you have a good financial advisor give alternatives about how you can invest these monies. The insurance company might also offer you a monthly payment in lieu of payment of a lump sum – assess to see if the discounted value of these monthly cash flows is higher than the lump sum value – if you have difficulty using spreadsheets you may need a financial advisor’s help.
Have been know to mount as a person reach the golden years – insurance and medical benefits have to be in place to ensure that coverage is adequate for all outcomes. Living a healthy lifestyle with the right food and exercise will ensure that your medical expenses at retirement could be lower than average.
Please look carefully at the fine print on medical insurance plans as they tend to leave you high and dry as certain age limits are exceeded.
Impact of inflation on retirement
My experience has been that inflation tends to quickly erode the value of retirement funds and the need to hedge against inflation is paramount. Therefore I would advise an investment in a few Blue Chip stocks and high dividend stock to ensure that hedging strategy will help with future erosion. Also the interest rates on Government securities have been woefully low so investing in the stock market is a better way to go. Also consider investing in Gold IRA’s as these have been designed to hedge against inflation as well as against currency risk due to the global financial crisis that is expected to hit soon. Please also read my article regarding investing in gold.
The nature of expenses will change at retirement. Tracking expenses is key to understanding how they can be reduced and controlled. Spreadsheet skills are important to keeping track of expenses or alternatively use mobile phone apps that offer to track expenses and provide graphs and reports automatically – most are free.
Is also important as you want to reduce tax liability for those who will receive inheritance. Wealth tax and estate tax rules differ from State to State therefore it is imperative that you consult a financial advisor on how to manage estate planning to ensure a lower tax liability. Estate planning is not a complicated issue and handling it upfront will ensure that you don’t face difficulties and expenses later.