How Early Should You Start Planning for Retirement?

Planning for retirement is often but on hold because Boomerang-kids are returning home during the period of time when parents need to speed up their retirement savings. I thought this article was particularly appropriate after writing the segment about the subject. Later Life is an organization providing educational workshops for future retirees. They had this to say about retirement planning. b+

Many people wonder when the best time to start planning for their retirement is. Some people think that the fact that we pay into a pension from a young age is enough, but few people realize that we should really up their efforts in planning for retirement around ten years before we’re due to stop working. This gives us sufficient time to prepare our finances and assess our options. Retirement is an exciting prospect; after all your hard work over the years, you finally get the chance to relax and spend more time with your family and friends, take up new hobbies, and enjoy yourself!

When should you begin...
 

As mentioned, some of us may pay money regularly into pensions and savings account, but then make no forward planning, and others may not have saved at all. When you reach the ten year mark, it’s time to assess your finances and begin to keep an eye on those all important funds. Think about the money you’re spending, and create a budget for yourself. Perhaps set a monthly or weekly budget, and check your bank balance on a regular basis.

Everybody sometimes underestimates how much they spend per day, especially on a food or clothes shopping trip with a debit or credit card! If you have Internet access, why not set up an Internet banking account? You can then check your account at your own leisure instead of waiting for your bank statement or going into your local bank, and transfer money across to your pension fund or savings account.

If you’re able to make more cut backs now, you’ll benefit yourself in the future. Pensions are usually a minimal budget, so saving now means that during your retirement you’ll have the money to still go on holidays and enjoy days out. You’ll certainly have lots of free time on your hands, so why not use it?

As retirement draws closer…

If possible, a few years before your retirement clear any debts to take away that added pressure during your retirement. Perhaps consider downsizing your home, or changing your vehicle to one that is more financially practical. Not only will both of these be cheaper for you, they may be more realistic as you enter into retirement.

How about also cutting down on your workload or work hours? Retirement is such a different way of life, that many retirees consider it a difficult adjustment - some feeling bored, or at times worthless. No longer do you need to be up early, work from nine until five and make your way home through rush hour traffic. You now have no obligations and are free to live a life of leisure! It’s best to ease yourself into retirement so that it’s not such a shock to the system. 

Use your final year wisely

It’s important to seek advice from a financial advisor in the last year of your working life. Not only can you gain valuable information and guidance, it allows you to make a plan for you and your finances in your retired life. Make sure that you have also informed the appropriate organizations of your retirement date. These may vary from the HMRC, who will help you to gain any benefits you may be eligible for, to applying for pension credit if you have been on a lower income.

A lot of people also find help in the form of retirement courses extremely useful. These courses, which can sometimes be organised through your place of work, can help you prepare for your upcoming change both financially and emotionally.

The trick to settling into retirement quickly and happily really is in the planning. Giving yourself plenty of time to prepare will  take away any extra pressure that you can definitely do without once you stop working.

The Circles of Life...a different look at financial mangagment

When James Barnett approached me with this infographic on investment, prosperity and financial management, I asked him for a supporting article to go with it.  Really, one picture is worth 1000 words. However, I found his words to be worth 1000 pictures.

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note:  Please be aware that this article is written by an employee of Pannone Law.I am not receiving any money to publish it.

The Circles of Life

Family Life is often tied between the equilibrium of divided wealth and investment management, which correlates the success of ones ambitions, influencing manoeuvrability in a competitive capitalist society. The Circles of Life, managed through a professional and structured financial arrangement can provide incredible opportunity and the essential building blocks to provide future prosperity for your families aspirations.

Employment features at the heart of life’s circle as it is the most significantly influencing factor for wealth creation and self-determination. It will often provide the financial means and investment opportunities in addition to becoming the source of generation for new relationships and lasting connections. Each career step, whilst layering responsibility within employment provides an external provision to invest in home assets and your family’s future.

The company employing you is likely to offer various perks through insurance, pension and financial planning, or in some cases be an offset of your personal management should you be able to negotiate a better deal with private lenders and market players.  The crucial elements to succeed within this financial cauldron lay within an understanding of the legal boundaries and market movements that controls the financial relationships within contemporary wealth management.

Trust funds can be used through different accounts to provide higher interest, conveyance knowledge can provide you a successful property sale, and tax levels can be reduced whilst retaining a fair contribution to compulsory earnings through a successful knowledge of the legal requirements to manage your income. Financial management often comes to a peak at the time of retirement, which should remain a highly rewarding and dramatic release from years of hard work and planning across life’s evolving circles. Upon reaching this stage, maximising your investment return will allow you to kick back for a much needed break.

Author Bio – James Barnett offer financial financial management and planing advise on behalf of Pannone Law and researches innovative ways to connect with families through new social channels.  Google +: James Barnett

Permission Granted: You Are Allowed to Guard Retirement Money

You are hereby granted permission to guard your financial wealth...even from your family. While generosity is wonderful, be sure that your family, both old and young, understand the consequences of giving more to them than you can afford. It is possible that bailing out a family member would actually ruin your retirement. Sobering thought isn't it?

My journey around the web today took me from Boomer Girl's Guide to Buck$ome Boomer and an article called The Power of Saying "NO" to Preserve Your Retirement. The author, Kay Lynn Akers, is a boomer sharing her thoughts on the financial side of getting ready for retirement. Her post today revolved around the problem that parents have in saying no to their children when they are in need or even just want more than they can afford. I could relate to what she had to say...we all want our family to be happy. But.....

The fact is, we need to guard that part of our financial wealth that takes care of us in our retirement years. If we don't do that, our children will be left with the responsibility of helping us at that time. Will your children be able to do that? One of the comments left on The Power of Saying "NO"...suggested one guideline we might be able to use:

I think the key is to never raid one’s retirement funds.... But I do help out (and sometimes bail out) my children from time to time....(Grace from Graceful Retirement)

There is no one size fits all answer for this dilemma. But when it comes to our retirement funds, the funds that will pay our bills when we retire, the answer is alway "no". That money should be kept separate from other money...untouchable probably. It may be easier to say that you don't have it than to give a flat out NO!

This is another one of those conversation I think you need to have with your children and probably when they are very young. Like you, they need to realize that all the money you make is not for spending now. Part of that money will be needed to buy groceries and medical care somewhere on down the road. Wouldn't it be wonderful if we never started to raise their expectation to begin with?

I invite you to visit Boomer Girl's Guide and Buck$some Boomer. They are both very popular blogs.

Just a thought.

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Related articles

How To Calculate Retirement NeedsPlan your retirement marathon... 10 years at a timeStudy: Boomers Give Up Savings to Help Parents, KidsFamily vs Retirement Tradeoff for Baby Boomers?

Bare Bones Budget from Nanny's Place 

Life Insurance Guide 2012 Why Life Insurance at our age???

Life Insurance Tips 

When my mother was in her early eighties we talked with her financial planner about purchasing a life insurance policy. Believe it or not, even a widow at her age (82) needed some life insurance protection. Not because there was anyone left that would be dependent upon her for support after her death but because this was a very good way to protect her money from all those people that wanted to get their hands on it after she was gone. By protecting her money she also guarantee that any outstanding debts she had was paid off (think home mortgage or any credit card debt). So yesterday when I was contacted by an insurance company representative with information on insurance policies I sat up and paid attention. As a quick review, here are some choices available to you:

Life Insurance Guide 2012   

Life insurance is a critical component of any financial plan and ensuring that you have the right kind of coverage is important. Without having the right kind of life insurance, you cannot be sure that your family will be taken care of if you pass away unexpectedly. When engaging in financial planning, keep these life insurance tips in mind.

Decide if You Want Cash Value  

When you're in the market for a new life insurance policy, you have to determine whether you want your policy to have a cash value. Term life insurance only provides a death benefit for a specific number of years. By comparison, whole life insurance gives you a death benefit and a growing cash value.

Some people do not want a cash value and would rather save money on premiums. Instead of paying extra money to get a cash value, you could just as easily invest that money on your own and earn more money over time. However, if you are not disciplined enough to make yourself set aside money every month, using a whole life insurance policy can be a decent investment.

Get Enough Coverage  

When it comes to choosing a life insurance policy, you also have to make sure that you have enough coverage. Many people who buy life insurance policies are under-insured and do not have enough coverage to adequately protect their families. You need to at least have enough money to pay off all of your outstanding debts and provide your family with a little cash. For example, if you have a mortgage, student loans, credit cards and an auto loan, add up all of the debts that you have. Then add an amount on top of the debt so that your family will have enough money to pay your final expenses and have some left over. The face value of the policy is ultimately the amount that your beneficiary will receive when you pass away.

Company Quality

When choosing a life insurance policy, you should also look at the quality of the company that is offering it to you. Try to find a company that is reputable in the industry and has a good history of paying claims. If an insurance company goes out of business, it will not be able to honor your life insurance policy. Make sure that you choose one of the best insurance companies in the industry to work with.

Decide if You Want Cash Value   

When you're in the market for a new life insurance policy, you have to determine whether you want your policy to have a cash value. Term life insurance only provides a death benefit for a specific number of years. By comparison, whole life insurance gives you a death benefit and a growing cash value.  

Some people do not want a cash value and would rather save money on premiums. Instead of paying extra money to get a cash value, you could just as easily invest that money on your own and earn more money over time. However, if you are not disciplined enough to make yourself set aside money every month, using a whole life insurance policy can be a decent investment.  

Get Enough Coverage

When it comes to choosing a life insurance policy, you also have to make sure that you have enough coverage. Many people who buy life insurance policies are under-insured and do not have enough coverage to adequately protect their families. You need to at least have enough money to pay off all of your outstanding debts and provide your family with a little cash. For example, if you have a mortgage, student loans, credit cards and an auto loan, add up all of the debts that you have. Then add an amount on top of the debt so that your family will have enough money to pay your final expenses and have some left over. The face value of the policy is ultimately the amount that your beneficiary will receive when you pass away. 

Company Quality 

When choosing a life insurance policy, you should also look at the quality of the company that is offering it to you. Try to find a company that is reputable in the industry and has a good history of paying claims. If an insurance company goes out of business, it will not be able to honor your life insurance policy. Make sure that you choose one of the best insurance companies in the industry to work with.

The information was a reminder that taking care of business when it comes to our financial planning and life insurance is more important than ever.  Just remember, even though you are financially able to live the life style you are living now, your children could lose a great deal if your insurance does not cover the mortgage payment at your death.  We are all well aware that getting property sold can be a problem.  As for the credit card company I don't even want to go there.

FYI

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