Top Retirement Planning Let’s take the example of two men Peter and Josh. Both are well to do individuals, earning decently well for themselves. Both are close to their retirement ages and in a matter of six months, they are bound to be relieved from their services. Peter is a guy who does not believe in planning his future. He knows that so far he has done remarkably well for himself and he will continue to do so after retirement. Josh is a person who is meticulous and likes to plan for the future. He seems to have taken his grandmother’s advice seriously-save for the rainy day. He has dreams to volunteer for a couple of charity organizations after retirement and pursues teaching and gardening. He has devised a financial planning for retirement because he wants to make the best of his post-retirement life. Flash forward to six months after the retirement day. Peter is bored, bloated and bummed out. Nothing interests him; he has seen it all and done it all. He wants to go back to the office and work. Josh is having the time of his life. He is having fun doing what he wanted to do. He is still healthy like before and he is busy with his teaching and gardening. The money which he had saved is an added bonus to him as he can now enjoy or reinvest as he likes. The above example teaches us that though both were talented, Josh planned his retirement well and so he is now a happier man. Post retirement, you may like to live a simple life like taking a stroll to the beach or you may like something as adventurous as traveling around the world. Your goals are achievable provided you follow proper retirement planning with desire and commitment. Let us now find out what Josh did that makes him a happy man now, thanks to early retirement planning: 1 Retirement income plan: Josh developed a retirement plan which kept track of his current income and expenses. He formulated a way to hold back on expenses which were not necessary. 2 Debt Reduction: Josh was clear that he did not want any sort of debt when he came to the retirement phase. He did not want to be a burden to his family members financially. He made it a point to clear his credit card debts, car payments, and mortgage and personal loans. He stayed away from creating more debts as he advanced to retirement. 3 Comprehensive and complete insurance coverage: Josh knew that he ought to have enough insurance to cover his life (life insurance), his health (health insurance), his vehicle (auto insurance) and his home(homeowners’ insurance). He went through insurance documents and paper annually to find out if they were to be altered to make some more provisions for his retirement. Luckily for him, his insurance company introduced some more extra features for his retirement needs. Since the offers were welcoming, he asked the insurance company to make the necessary changes to modify his policy to suit his retirement. You should also find out if your employer is offering you coverage for retirement. There are some employers who may not give your retirement compensation or money to fund for your medical expenses after you retire. Josh thoroughly ran a check on his employer’s retirement program, insurance coverage from his employer as well as his insurance provider to find out what are the other ways in which his family and he could remain protected. 4 Liquid funds: Josh made sure that he had liquid funds that could cover him for at least six months of expenses without eating into his investments. 5 Savings plan: Josh’s employer gave him a tax sheltered saving plan like a 401k, and he made it a point to contribute to the plan. This reduced his tax liability and also made him benefit from the money which came in the form of compounded interest. He advises people to pay attention to retirement and tax planning because both are complimentary to each other. 6 Social security benefits: For making the most of this, Josh consulted with a social security representative, a year before he planned to retire. He knew that one should apply for social security three months before one aspires to collect his or her privileges. He applied three months before he turned 65. 7 Invest in IRA: Josh wisely put money in an Individual Retirement Account (IRA), so that he could delay actually delay paying taxes on the earnings from his investment. This is a clever move for retirement income planning, because according to the government if you invest in an IRA early at say 4%, you can earn a lot of money when you retire. 8 Check on your will and trust: Josh drafted a valid will or trust. This helped him well in protecting his assets. 9 Invest in the right instruments: Financial experts emphasize that when you are in your 20s and early 30s, you can invest more in high risk equity and mutual fund markets. When you reach 40, you should balance your portfolio and invest in debt-related instruments. Josh got it right as he slowly build up a conservative portfolio with most of his investments in debt related instruments as he crossed 40. You may consult a financial advisor or someone who deals in retirement planning services, for more information and smart investment tips (just like Josh did), so that you retire with a good amount of wealth. 10 Health: This is one of the most important things which ironically most neglect. Health after all is wealth. This is one of the key elements in retirement investment planning. You have to invest in your health because it will determine your earning capacity and peace of mind in the later years of your life. Apart from following a good diet and regular exercises, Josh practiced meditation and Yoga. The last two can actually prolong your age because they keep you rejuvenated, fresh and keep your system free from toxins. He also applied for Medicare. There are two aspects to Medicare, the hospital insurance which is the money which does not go out of your pocket and medical insurance in which you get reimbursed. Lastly, Josh made use of a retirement planning calculator for effective retirement planning. He discovered the fabulous benefit of this retirement planning tool. He also sought online help and made the best use of retirement planning software and online tools and guides for hassle free and peaceful retirement. With the help of the retirement calculator, he could evaluate the growth in his retirement savings during his working years as well as the value of his savings during the years when he withdrew money post retirement. Taking into account the money that he invested, the rate of return on his investments, the expected inflation rate during retirement, the amount of social security and pension that he stood to get and other influencing factors, he charted out a plan of action that helped him retire and manage his money smartly so well that he continued to reap the best benefits of life after retirement.

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