Retirement planning is the process of determining retirement income goals, and the actions and decisions necessary to achieve those goals. Retirement planning includes identifying sources of income, sizing up expenses, implementing a savings program, and managing assets and risk.
Future cash flows are estimated to gauge whether the retirement income goal will be achieved. Some retirement plans change depending on whether you’re in, say, the United States, or Canada, which has its own system of workplace-sponsored plans.
Retirement planning is ideally a lifelong process. You can start at any time, but it works best if you factor it into your financial planning from the beginning. That is the best way to ensure a safe, secure-and fun-retirement. The fun part is why it makes sense to pay attention to the serious and perhaps boring part: planning how you wIll get there.
In the simplest sense, retirement planning is the planning that one does to be prepared for life after paid work ends, not just financially but in all aspects of life. The nonfinancial aspects include lifestyle choices such as how to spend time in retirement, where to live, when to completely quit working, etc. A holistic approach to retirement planning considers all these areas.
The emphasis that one puts on retirement planning changes throughout different life stages. Early in a person’s working life, retirement planning is about setting aside enough money for retirement. During the middle of your career, it might also include setting specific income or asset targets and taking the steps to achieve them.
