What is Retirement Planning?

 What is Retirement Planning? 

 
Retirement Planning is one area of planning that deserves a closer look, and hence everyone should be looking at effective ways to plan well to enjoy the sunset years of life. 
Presently, financial planning has become one of the essential aspects of an individual’s life as it helps in achieving long term as well as short term goals.  

Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of life. By viewing each financial decision as part of a whole, you can consider the short term as well as long term effects on your life goals. A financial plan includes four components such as insurance planning, retirement planning, investment planning and lastly tax planning. One of the important components is retirement planning which is ignored by the majority of people.  

Retirement planning is extremely critical because the quality of life for a large part of later years depends on the kind of retirement planning undertaken.  

Now the question arises, what is retirement planning? The answer to this question is, retirement planning is the process of undertaking a financial plan to afford one’s sunset years of life. This means the process of saving and building up a corpus that is invested in various asset classes that will result in income and earnings for the individual over some time. This income and earnings you will earn during retirement will take care of the fall in receipts as one ceases to work and earn on a full-time basis after retirement.  

Key features of retirement planning:  

• Set objectives for the time of retirement.  

• Identify the amount of funds required during retirement when your regular income will get ceased.  

• Reserve funds for specific purposes. 

• Make sure that funds reserved are targeted at specific areas of investment.  

• The ultimate goal is that the invested funds should achieve the initial objectives.  

• Monitoring of plan at regular intervals.  

• Modify or alter the plan if conditions require it and it is off track.