Retirement Planning

Retirement Planning

Introduction

Nothing in life is more important than planning for the future of oneself or the loved ones. There are various things like latest smartphones, Jewelry, TV, house, Cars and other lavish spending which one indulge in and tries to get them on short-term basis. He should create a balance between the present spending and saving for the future(Gijsen 2002). This is because what a person is spending may be from his present income but in the future when he retires there won't be any income for him to spend. Many of the younger generation are also in the habit of non saving they fell that there is too much time for them to earn but slowly and gradually that time depart and they repent.Thus it is better to be careful from the very beginning , reduce the spending in the present time and plan for the future in the best possible way. Thus it will save the person from the hard times which he could have faced other wise.

The most serious risk that comes in planning for the live is outliving your money. If this problem is found in people than they will have to work until the last day of their death or in other scenario, they have to live a life of poverty(Jasper 2005). With so much distress in social security and after the recession of 2008 the system itself is calling aloud that don't count on it too much(Ruffenach and Greene 2007). This is because when a person will retire the social security will only be able to cover 40 percent of the cost of total yearly expenses. This is a very dire situation but it is a real situation, which one should not forget.

Thus to avoid these sort of scenario one should write his or her goals. If one has a partner than combined, goals can be written. The basic thing with writing up of the goal is the living standard which one lives in and what sort of standard one would prefer to live in future (Ruffenach and Greene 2007). The state that he would choose, the cost related to it and inflation effects in the future. So, on the basis of this future calculations will be done of which the present value will be calculated.

These retirement planning has a great impact on both at the individual and group level. These impact on people ultimately has major impact on the economy of the country and globally. Thus, there is no reason that one should not be prepared for the retirement period(Ruffenach and Greene 2007). The sooner it will be the better result will it has and the better chances of fulfilling the needs of the individual will be there in future. These retirement planning can be done by persons himself, but for better result a professional retirement planner needs to be consulted.

Importance of Retirement Plan for an economy

Those countries, which have a huge saving habit, are the one that prosper the ...