Have you ever seen a bird building her nest, layer by layer, making it secure and comfortable for herself, her eggs, and her baby birds in the future? Retirement can be just that, with careful preparation and secured future planning. It is a big step in financial future planning. It is a stage that every person, who works, has an opportunity to encounter in her or his lifetime whether one is employed, or is an entrepreneur. Chances are you already have a specific age bracket you wish to retire when; whether young or old.
This article is all you are searching for if you need to know about ‘Phases Of Retirement Goals’. This guide looks at the different retirement planning steps, each like a layer built carefully to make a strong savings fund, just like that bird’s nest. We will provide a summarized overview of all the phases, including pre-retirement, retirement, and post-retirement. So sit back, and keep following the article till the end!
What Is Retirement Planning?
Let me give you the best definition of ‘Retirement Planning’ available on the internet,
‘A retirement plan is a way to save and invest money for when you stop working, so you can have enough money to live comfortably.’
Again the same thing that almost hundreds of websites covered to inform you about retirement planning! Isn’t It Boring To Understand? So let me help you understand it with the help of an example.
Let us imagine you are a squirrel, and just like a responsible squirrel, you are gathering nuts for your family and baby squirrels for the upcoming winter season. The winter season explained in the example is like your retirement period.
- Saving nuts: You set aside some money each month like the squirrel gathering nuts. This could be from your paycheck going into a retirement account.
- Growing your stash: The squirrel might hide nuts in different places.You can invest the money for retirement in various asset classes such as stock or bonds with the aim of intending profitability over a certain period of time.
- Knowing how many nuts you need: The squirrel must have a supply of the nuts to sustain it throughout the winter period. Similarly, you have to predict how much money you will require to maintain a satisfactory standard of living after you retire. This takes into account your overhead personal and lifestyle expenses.
- Adjusting your pile: As winter gets closer, the squirrel might gather more nuts. You might adjust your retirement savings as you get older, maybe saving more as you earn more.
Need For Retirement Planning: How Significant It Is?
Think of it like this: He or she further pointed out that, retirement planning is not just about preparing oneself for the rest of his or her life but to prepare for a lifetime of being on ones own. It is all about how much you require to save for your retirement, how they expect to manage to pay all the expenses without stress and all the emergences that they do not wish to experience. Remember, nobody wants to spend their golden years stressing about money!
That is why by planning for retirement, you are, in fact, gifting yourself that essential and invaluable thing: sleep of peace. There is insurance for the longevity of life beyond what may be expected, there are unpredictable shocks, and there is the ability to purchase the items that you consider importance for you. So, ditch the worry and feel the excitement! Let’s get you started on building a secure and stress-free retirement.
Phases Of Retirement Goals: Explained!
Securing your money for both before and after you stop working is the main goal when following the four stages of retirement financial planning. It’s about saving money, deciding when to stop working, and how to use your retirement savings later on. Planning your money for each part of your life helps you to be ready for when you stop working.
There are three stages involved in retirement planning that you need to pay attention to get an efficient and secure retirement life in the future. All three phases are explained below:
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Pre-Retirement Stage
To explain accumulation here is an example, suppose you own a plot and planning to do gardening on it. Looking after the soil and its nourishment is the first step in the pre-retirement phase, making sure your upcoming years will flourish.
- You put compost and vitamins in the soil to make it better. In the same way, you put money aside early before you retire and make regular contributions to build a strong financial base.
- You decide what vegetables or flowers you want to grow. In this stage, you explore different investments, picking the ones with the potential to grow your savings for your dream retirement.
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Retirement Phase
Lastly, you are feeling the benefits you harvest from your garden as the result of the effort and perseverance you committed on preparing it. Retirement therefore can be described by saying it is like breaking to enjoy the things that one has saved and or invested on, prior to reaching a time when one is considered relieved of his/her duties.
- Just like carefully planning which vegetables to pick and when to ensure a continuous harvest throughout the season, you’ll develop a distribution strategy in retirement. This is a choice for a retiree on the amount of funds to withdraw from the retirement investment plans to cater for the lived lifestyle. These could include your living expenses, inflation rate, and; probably possible and probable health costs.
- In retirement, you can enjoy the homegrown food you’ve grown and not worry because you have saved money to live comfortably and peacefully. This money security lets you do what’s important to you – like doing things you enjoy, being with family and friends, or just relaxing and enjoying your retirement.
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Post-Retirement Stage
On the same garden analogy, picture your garden has grown, and you’re taking care of it with less energy. Retirement is like taking care of your garden after it’s been growing for a while, making sure it keeps doing well even if things change.
- As you get older and stop working, you might need to change how you spend your money to stay financially healthy. This could mean moving to a smaller home or thinking about your medical care needs again.
- Depending on the retirement plans you have, you will receive either a one-time payment (lumpsum) or monthly payments as part of your pension. These ways of making money will help you pay for your everyday needs and other expenses like medical bills if you have prepared for them in advance.
(Bonus Tip: BFC Capital’s retirement calculator can be a helpful tool to estimate your retirement needs and get you started on building a personalized plan.)
Concluding Points!
By taking good care of your money at each stage, you can make sure you have enough for the future and can enjoy a worry-free life. Don’t forget, planning for retirement is like taking care of a garden – it needs regular attention but gives you a lifetime of happiness.
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Disclaimer – This article is for educational purposes only and by no means intends to substitute expert guidance. Mutual fund investments are subject to market risks. Please read the offer document carefully before investing.
