Retirement Fund

Retirement planning involves determining retirement income goals and what’s needed to achieve those goals. Retirement planning includes identifying income sources, sizing up expenses, implementing a savings program, and managing assets and risk. Future cash flows are estimated to gauge whether the retirement income goal is possible.

You can start at any time, but it works best if you factor it into your financial planning as early as possible. That’s the best way to ensure a safe, secure and fun retirement. The fun part is why it makes sense to pay attention to the serious and perhaps boring part: planning how you’ll get there.

The emphasis that one puts on retirement planning changes at different stages of life. For instance:

• Early in a person’s working life, retirement planning is about setting aside enough money for retirement.
• During the middle of your career, it might also include setting specific income or asset targets and taking steps to achieve them.
• Once you reach retirement age, you go from accumulating assets to what planners call the distribution phase. You’re no longer paying into your retirement account(s). Instead, your decades of saving begin paying you out.

How Much Do You Need to Retire?

Remember that retirement planning starts long before you retire. The general rule is the sooner you start, the better. Your magic number, which is the amount you retire comfortably, is highly personalised. But there are numerous rules of thumb that can give you an idea of how much to save.

While the amount of money you’ll want to have in your nest egg is important, it’s also a good idea to consider all of your expenses. Be sure to calculate the costs for housing, health insurance, food, clothing, and your vehicle/transportation. And since you’ll have more free time on your hands, you may also want to factor in the cost of entertainment and travel. While it may be hard to come up with concrete figures, be sure to come up with a reasonable estimate so there are no surprises later on.

 Start as early as you can on whatever method that you, and possibly a financial planner, use to calculate your retirement savings needs. As per rule of thumb 20% of your annual income should go for retirement fund then this will create the amount you required to be retire happily.