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Planning For Retirement

By: Gregory
Friday, November 30, 2012
Planning For Retirement

From both a personal and financial perspective, realizing a comfortable retirement is an incredibly extensive process that takes sensible planning and years of persistence. In this News Letter we'll break down the process needed to plan, implement, execute and ultimately enjoy a comfortable retirement. All it takes is a little homework, an attainable savings, an investment plan, and a long-term commitment.

  1. Planning Ahead for Retirement:

    The first thing, decide when you would like to retire. Knowing how long you are away will determine how much you will need to save. It is better to have more than you need than to outlive your resources.

  2. Determine Your Retirement Lifestyle:

    Determine what retirement lifestyle you want, decide if you want to maintain or improve on your current lifestyle. If you know how much it costs to live now, you are in a good position to know how to prepare to live at that point. There is no method to know for sure what cost of living will be like then, since you cannot be certain how inflation rates, investment returns and incomes, among other things, will be in the future.

  3. Decide How to Get There:

    The beauty of starting early is that you can build up a strong retirement fund with little pressure, and there is room for recovery if there are National Insurance Scheme (NIS) your retirement income and cover any shortfalls. This is good because of the protection it promises aa a hedge against inflation.

    • Being Self Employed

      As a self-employed person, you are eligible to open an Approved Retirement Scheme account (ARS). Several financial institutions, for example, credit unions and life insurance companies, offer them. You may deposit up to 20 per cent of your annual income into your ARS. That portion of your income is not taxed, so pay as much as you can into the ARS.

  4. Be Flexible in Your Retirement Savings:

    You may have to adjust yourself to accept retiring later than you want to if your plans go off track. Medical expenses are likely to increase during the period of retirement. Extra savings will be necessary to pay for long-term insurance, medical care and retirement. For the majority of retires, increased medical expenses are a certainty that increased savings can help you to cover. Remember your financial life after retirement is in your control, you alone can choose what type of life you want after retirement.

    • The quality of your life in retirement can be impaired by several factors, such as:

      1. Insufficient savings: The retirement years can be the most exciting time of your life, but if you don't save adequately, it can also be the worst period of your life.

      2. Delay in starting retirement-planning: Here in Jamaica, the age of retirement in the public sector is being phased from 60 to 65, while some companies in the private sector go up to 65. This means that the average person has approximately 40 years to prepare for the 'twilight years'. Even though this may seem like you have many years to start saving and can, therefore, afford to start at age 35 for example, the fact is, the sooner you start saving, the better the rewards will be for you. In fact, saving should begun from you receive your first pay cheque.

      3. Change in personal and family circumstances, including changes in health, marital status and family size may affect the retirement years.
  5. Prepare for the worst

    As much as you can, protect your health, but prepare for the worst by putting in place proper arrangements for health-care costs and disability for now and later. Other emergencies' such a death in the family or even acts of Nature such as; earthquakes and hurricanes give cause for concern. Remember, changes in the economy and financial markets can seriously impair your retirement lifestyle.

So you want to plan wisely for retirement from now. Start now. Do not delay, and stick to your plan.

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