It is easy to think of retirement planning as something to put aside and to worry about in the future, especially if you are a small business owner or a young self-employed person at the beginning of a career, right? However, it is something fundamental for everyone, from the youngest to the most adult. In fact, what else would allow you to maintain your standard of living when you will no longer work?
There is a substantial increase in life expectancy in America today. The average retirement age is 66 years, while the life expectancy is 80 years. There are many years in between that you could use to check off your bucket list!
Having retirement planning will give you the security you need to manage your incomes and investments peacefully, leading to a worry-free life from a financial perspective.
Reasons why retirement plan is important
Having an accurate view of your financial situation and sticking to an efficient retirement plan ensures your security in retirement. Your plan can help you in calculating the rate of return you need on your investments, as well as the risks you should take and how much profit you can retire from your portfolio.
Funding retirement will benefit the inflation-beating returns. Keeping your wealth in a bank savings account will not produce significant returns. In other words, the profit earned won't be enough for an uncompromised retirement. Proper investment planning is necessary precisely because it will help you make significant advantages in the long term.
Also, in case you didn't already know, your retirement investment earns compound interest. Over time, that compounding effect can make a big difference in your retirement situation!
Are Social Security benefits not enough?
According to Northwestern Mutual's 2019 Planning & Progress Study, many Americans don't have retirement plan savings. That's alarming data, especially considering that Social Security won't be enough to guarantee all you might need for your future.
Medicare, for example, doesn't embrace the costs of assisted living.
While Social Security does make you suitable for low-cost medical, they most likely won't be enough to give you your dream retirement. Medicare and Social Security are meant to complete your retirement, not be depended on entirely. They could even be taken away.
Proper retirement planning is necessary if you want to live up to your lifestyle standard, and it's also the right price to enjoy after many years of working!
Hire a tax professional: define a plan and lead a worry-free life
Retirement planning demands a blending of financial and personal planning. Personal planning defines one's comfort and satisfaction during retirement. For example, some people might want to explore many countries and travel the world, while others would like to focus on family or dedicate themselves to their passion. The options are truly endless!
The first step is to understand what you expect your life to be like in the future, Whats financial situations, and the assets and properties you want to have. Having a plan will be fundamental in budgeting your income and expenses to get to the life you want as soon as possible.
Approaching bureaucratic planning and paperwork can be a confusing path. Yet, there are solid reasons for embarking on this itinerary as soon as possible. The good news is that hiring a tax professional can help you clarify what you need and how you will need to move.
AT Vicky-Q agency in Louisville, Kentucky, we want to make your retirement the best time to fulfill your life aspirations. With a team of financial experts, you'll get the chance to have a retirement plan tailored to your needs and lifestyle. Contact us for more information and start generating significant returns for your future.