Being one of the most important events you might have to face in life, retirement is something that most of us will have to experience! From a financial as well as a personal perspective, making sure you have a comfortable retirement can be a tricky and complicated process that involves years on end of sensible planning and persistence. Once attained, managing retirement is a responsibility that is continuous and can carry well into your golden years!
While most of us would prefer a comfortable retirement, the time required and the complexity involved in developing and building a successful retirement plan can make the entire process seem challenging and intimidating. On the other hand, retirement planning can also be done with as little pain and frustration as possible (financial pain included) than you can imagine - all it really takes is a little homework, an achievable investment and savings plan, and a good long-term commitment.
Planning Your Retirement
At the bottom of it all, planning the basics of your retirement is actually a very simple and straightforward concept. Like bears getting ready for hibernation, or squirrels preparing themselves for those long, cold winter months by stashing away their nuts, planning for retirement is just as easy as that! Unfortunately, it tends to get a bit more complicated for humans, like everything else does! Those squirrels and bears only need their stash to survive through the winter, while we retirees need our stash to survive for twenty, thirty, forty, maybe even fifty odd years! This is what makes the whole concept of retirement seem overbearing.
To make things worse, we are submerged underneath tremendous amounts of conflicting advice about matters like how we need to invest our savings, do we need to hire an adviser? Should we make use of actively managed funds or index funds? What funds should be bought? How do we go about making the best portfolio to receive the highest returns? What with all these questions looming over our heads, no wonder the planning can seem challenging!
However, what really matters is that we save up adequate amounts of money to survive for a long, long time. Besides this, we need to make fairly good investment choices. So, what really matters is that you build a solid retirement plan and stick to it.
Getting Help from Retirement Calculators
To evaluate and determine how much money is needed for you retirement, you must first decide how much money you are willing to spend in retirement. What are you looking for in terms of standard of living when it comes to your retirement and how much would it cost you to fund that standard? This is one of the most important factors when it comes to planning your retirement.
The fundamental question thus arises - how much are you willing to sacrifice during your working years? For how long? - just so that you can retire comfortably. Retirement can get even more intense when you take into consideration factors like care for elderly parents, children's education, health costs, etc. yes, it is very easy to get bogged down by the weight of the whole situation, but it would be easier just to understand what costs are involved and what the benefits of your various options are.
This is where a retirement tool comes into play. This calculator will help you experiment with different retirement ages, savings levels and even different retirement spending habits. By using a calculator to run these 'experiments', you will see for yourself the benefits and costs involved in taking different paths. Retirement planning is of course a very personal concept, and you are the only one who can make decisions for yourself and your family.
Advantages and Disadvantages
These calculators are tools that can provide you with useful information when it comes to making choices about different retirement options. However, retirement calculators are not 'smart' tools and what they can't do is weigh out options for you. They are simply there to help you by providing you with information that can help you make choices.
Most of these calculators will ask you to give information like your desired retirement age, expected savings, yearly expenses that you plan on incurring during your retirement. The calculator will then use this information that you have provided, together with certain assumptions like taxes, inflation, and portfolio performance, to determine your savings for your retirement. However, the success rate of this tool is as low as 50%. so, you have a 50/50 chance of getting enough money for your retirement. But on the other hand, is the success rate indicates 90% and above, then your retirement plan is probably high as well and the chances of you having a high likelihood during retirement will be strong.
Now that you are ready for retirement, then this is the best time to jump in and learn all you can. Never delay the process. Remember that time is of utmost importance here, so start with the planning today itself!
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