4 Pertinent Questions that You Should Ask Yourself to Select a Great Retirement Plan

4 Pertinent Questions that You Should Ask Yourself to Select a Great Retirement Plan
  • Opening Intro -

    The majority of the Americans are worried about how much money they will have when they reach retirement.

    You may have a high income now but your present savings will not last long if you do not have a robust retirement plan in place.


So you should ask yourself the following questions when you are starting a retirement plan or determining if your present plan is enough.

1. How much longer do you have till retirement?

The first thing that you need to decide upon is your retirement age. Then you deduct your present age from the projected retirement age to find out how many years you have in hand to save money. Then you need to calculate how long you need to use that retirement savings. Since no one knows how long he/she will live, it is advisable to plan till 100 so that you have lots of savings during your retirement. All these are very important information when you begin your plans for retirement.

2. How much money can you afford to keep aside for retirement?

This is where the budget becomes very important. If you do not have a budget in place, then you should start one right away. The longer you wait to start your savings, the less money you will have for retirement. You need to figure out much money you can afford to set aside on a monthly basis and then calculate how much money you will have at the time of retirement. If you have 20 years left for your retirement and put away USD 50 per month for the whole period, then you would have saved USD 12000 when you reach your retirement. That amount of money will surely not last through your retirement; so you should plan to put away more per month as your income increases. In this way you will be able to lead a credible standard of living even after retirement.

3. How much risk are you willing to take?

This is a very important and pertinent question to ask yourself when you are planning for your retirement. There are some plans which are invested in the market and hence there is a risk of losing money if the market does not do well. There are other plans like fixed annuities which do not have any market risk and one can earn interest without risking his/her money in the market. The best thing to do would be to speak with finance professional to determine the extent of risk you are comfortable with.

4. Do you need early access to the money?

When you are choosing a retirement plan, it is a good idea to consider that emergencies that may come up if you become ill or seriously injured. There can be hefty medical bills or maybe you need to pay a substantial amount of money for child’s education. There are a number of retirement plans which impose penalties for accessing your money early; so you must understand the restrictions that you retirement plan offers. There are some policies which allow you to take out loans while annuities and IRAs are not that flexible.

Planning for your retirement is one of the most important financial decisions that you will take and this article will help you in this regard. You can share this article on social networking sites like Facebook so that your friends and colleagues are equally benefited and in exchange you can also ask them about their viewpoint on various retirement policies that are available to you. In this way you will be able to make the best decision and select the right plan that is most suitable for you. For further information you can visit http://financialmentor.com/free-articles/retirement-planning/5-essential-pre-retirement-planning-questions.

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