To think and plan for retirement are two different things. Most people do not think about retirement, let alone planning for retirement. But successful financial people always have it in mind.
Financially successful people do not break the bank because of retirement, but you need to save for it and prepare for it.
For the fact that you aren’t going to work for ever makes it significant to start planning ahead before you retire. You are going to age and that period you are not fit again.
However, here are some of the factors financially successful people consider in order to have a successful retirement plan.
They Save Early Enough for Retirement
Financially successful people do not wait, in as much as they earn an income at the end of every month. They start early enough putting their retirement savings together, and they are always making more savings.
Start today, do not procrastinate because you should start believing the power of compound interest.
They Have a Projection of the Future
Their projections are solely dependent on how much they can save in the long run, and these will have an impact on what lifestyle they want live afterward.
“The first thing is to decide at what age you see yourself retiring and to figure out what monthly income you will need to live when retiring at that age,” says Jerry Linebaugh, founder, and CEO of JLine Financial
“You will want to ask yourself questions like, if you want to live at this current lifestyle you live now, or some reduced way of life? If your home will be paid off? What other debt might you have or not have at that point?”
“Depending on the answers you find, Linebaugh said, you might be able to establish a lifestyle that thrives on just 80 percent of your present income.
By living below your present means, you can better pad your retirement while you’re enjoying it.”
They Work with a Financial Expert
One of the factors that quickly bring them to the proper lane is that, they work with a financial planner. An expert will probably give you the needed expertise on issues about retirement.
“Get a financial plan from a fee-based, independent, objective financial planner.” Why work with a fee-based financial planner? says Ric Edelman, chairman, and CEO of Edelman Financial Services, LLC
According to Forbes, the only financial planner has fewer inherent conflicts of interest as they do not accept fees or compensation for product sales.
Set your Retirement Goals
Apparently, setting out your financial goals and sticking to it serves as one of the basics of a retirement plan.
“We have a lot of wealth planning discussions with clients, and whether discussing retirement or financial planning in general, the process can initially seem complicated and overwhelming,” says Julie Lambert, Charles Schwab branch manager in Plano, Texas
But one of the things we try to do with clients is cut through the complexity and get them engaged in the process by laying out their individual financial goals and discussing how to reach them.
Once clients have a comprehensive financial plan, they’re more confident, more likely to stick to it, and more liable to reach their goals.”
They know their Present Cost of your Lifestyle.
They always calculate their current cost of living. That gives them an idea of what your lifestyle will look like at retirement. This will probably gives them an insight of what they should be targeting in their retirement plan.
“Knowing your realistic ‘burn rate’ or the amount you need to support your lifestyle today is critical,” says Bob Klosterman, CFP, CFWA and CEO/CIO at White Oaks Investment
He argues that in his experience, too many have unrealistic expectations that fall short of some annual living expenses that they truly will need.
They try to eliminate ‘one-time expenses’ without recognizing that most often we have one-time serial costs. Those expenditures still need to be considered in targeting a retirement goal.”
They Know their Present Income?
For instance, how much you earn today? And probably how much you are likely to make in future. The fact is that your current financial situation is an indicator of what your retirement plan will look like.
“The first thing that should be done in retirement planning is to understand your current and expected monthly expenses during retirement truly,” says Justin Tondre, CFP with TL Private Wealth
He adds: Having a handle on costs will help significantly decrease the greatest threat to retirement — outliving retirement assets.”
Do not wait till tomorrow, start planning for your retirement today.