Planning to retire one day?

I am only 25, and that's much too early to think about retirement. Right now, my aim is to enjoy life and not think about retiring.

I can't believe it! I am retiring next year and I don't know how I am going to cope. I thought I was prepared but … obviously not.

Are you familiar with those kinds of comments from friends, family members or co-workers? Or perhaps the possibility exists that this is in fact what you are saying or thinking. Many people focus on things like ensuring that their children go to university, on building a house or buying a new car. In doing so, they put off planning properly for their retirement. Don't be caught in that trap; be prepared! Your past will hold the key to your financial future, and if you plan correctly, to a blissful retirement.

If you want to maintain the lifestyle you currently have or to create a better one in your retirement years, you will have to implement your plan today. You need to know how much money you will need for retirement and if the funds you are currently saving will be sufficient to meet your needs. Remember, you will no longer be earning a steady salary so your income from your investments will have to be used when you have retired.

The following is a step- by-step guide to planning for your retirement:

Step One

Have an idea when you want to retire. The usual age range is 60 – 65.

Step Two

Know the lifestyle you want to live, and this will be determined largely by your financial position now and then. Are you going to live as you do now or will you be improving on your current arrangement? Perhaps, you are currently living in a four (4) bedroom house in a nice community but you might want to trade this in for an apartment in a gated community. Maybe you want to travel to places you have never visited. Maybe you will need to trade in the vehicle you now own for an earlier model.

Step Three

Ascertain how much money will be necessary to maintain the lifestyle of choice. It is recommended that a minimum of sixty percent (60%) of your annual pre-retirement salary should be adequate as annual income in retirement. Have a budget just for retirement.

Step Four

Examine your current investments. This should also include your pension, health and life insurance so that you will have an idea how much funds you will receive when you retire. Will you be receiving a pension cheque each month and will your life and health insurance be adequate?

Step Five

Acquire the services of a Trusted Financial Advisor. If you don't already have one, you'll need to find one soon. Ask your friends and co-workers for referrals. Your financial advisor will be able to guide you into having a more enjoyable and organized retirement. They will be familiar with the appropriate investments that are in the market and will be able to design an investment portfolio to suit your needs.

Step Six

Don't leave your retirement to chance; start planning today. Delay is danger.

Ensure that you are prepared and looking forward to what should be the best years of your life by planning to retire today. Seek a trusted financial advisor who will guide you through the process step by step.

Are You Close To Retirement With Limited Savings?

If you are close to retirement age, then hopefully you have a large chunk of money already saved to last for a good amount of time. If you don't, then it is important that you do not wait a day longer to start your retirement fund! You may be starting at a pretty late stage, but there is still some time left.

However, you must realize that you may not reach that desirable amount you could have, had you started earlier. On the contrary, you are older and less likely to squander excess money on entertainment and other optional expenses; therefore, setting your priorities should be easier.

Shedding expenses

Start by shedding your expenses and finding the fat in your budget. Do you really need to order lunch at work everyday or visit the salon every week? Explore cost efficient alternatives to the things you spend your money on. Instead of impulse shopping, picking up the first good thing you see, how about shopping around for bargains/better prices? Chances are, you'll find them.

One of the things you can also do to assist in finding extra cash is sourcing additional income. If you have a skill or talent, maybe you can turn this into an income source. If possible, get yourself a weekend job for a period of time. If you travel annually on vacation, foregoing that this year and saving the money instead, wouldn't be a bad idea. At this point, you need to make as much sacrifices as you can make, to ensure a financially secure future.

Assess you lifestyle (house, vehicle, spending habits).

You've probably gotten use to the lifestyle you've built for yourself, but changing it a bit may be your only option. If you live alone or have a small family living in a large house, for which you pay a hefty mortgage or rent, the time has certainly come for you to consider moving to a smaller and more cost efficient abode (in some cases humbler). If you drive an expensive car, the time has come for you to consider a downgrade. If you take your family to expensive restaurants on a regular basis, this may have to be reduced to once a month (depending on how much you had already saved towards retirement).

If you stick with it and dedicate yourself for a period of time to do some heavy saving, eventually you can go back to the lifestyle you once enjoyed. At that point, you would feel more comfortable to know you have money to fall back on, should your monthly income cease.

During this period, you will have to be true to yourself with your projection of how much you can have, after a specified amount of time, based on your income and other sources of money. You can do an estimated calculation and see if the amount would be adequate after you retire (note, that your aim should be to have more than adequate funds in place). Having enough money to survive during those all-important retirement years is important, and even though you may have had a late start, every dollar counts and will go a long way in building your nest egg.