Preparing For Retirement

Certain questions arise whenever an employee starts to think about retiring. Sadly, many reach retirement age unprepared. Some started planning late because of ignorance or lack of information. Some had a mindset that getting ready for retirement should be done when you're nearing the age of retirement.

The following list some information on retirement that should be helpful to employees of all ages.

1. RETIREMENT AGE
One's full retirement age varies but one can start receiving benefits at age 62 regardless of that. Full details can be found at Social Security Online Retirement Planner (http://www.ssa.gov/).

2. COST OF LIVING
Note the basic expenses you will continue to shell out regularly after retirement. Note also the probable expenses that might come up once you retire, like taxes and insurance for example. List needed or desired purchases that would come up by that time, like a vacation house. Knowing these probable costs now gives you the basic amount you should be able to save before retirement day comes.

3. RETIREMENT BENEFITS
a. SOCIAL SECURITY
www.SocialSecurity.org can provide you with an estimate. Getting an estimate of your retirement benefits will help you as you plan how much of your income should be set aside for retirement savings and or how much of your income should be used for other investments.

b. PENSION PLANS. Here, a monthly premium is paid for a specified time frame. With pension plans you can know how much you'd be receiving when the plan matures. Some companies get pension plans for their employees. But for those who don't, the employee can either request it or he himself can secure his own pension plan from a pre-need company.

4. INVESTMENT OPTIONS
a. SHORT TERM INVESTMENTS. Examples of these are bank deposits. You can save small amounts of money plus you have security because these deposits are insured.

b. LONG TERM INVESTMENTS. Examples of these are stocks and bonds. You can save larger amounts of money here. These investments however, are not insured.

5. LIFE AFTER RETIREMENT
It helps to know now how your living conditions will be after you retire. This helps you set a targeted amount of total savings in order to achieve that lifestyle you plan to have in the future.

Would you be taking it easy by that time? Then you must start planning and saving much now. Would you be seeking other employment opportunities? That would mean additional funds for you. Would you want to have a fixed source of income after retiring? Then plan and save up for an affordable real estate investment now.

Yes, retirement comes later. But retirement planning is not for the old, it’s for the young. Start planning now.