Retirement Planning Tips for a Secure Future & Financial Freedom
Whether you are just entering the workforce or you are preparing to stop working in the next few years, it is never too early or too late for retirement planning.
In order to construct a solid, effective retirement plan, you need to consider several important factors, such as:
- Your intended lifestyle during retirement.
- The age at which you hope to retire.
- The amount of money you have already saved.
- The amount of debt you need to pay.
- The amount of current salary/income.
Addressing these issues will help you determine how much money you will need during retirement so you can formulate an appropriate saving and investment plan.
How Much Money Do I Need to Retire?
Perhaps the most common question asked by those developing a retirement plan is,“How much do I need to retire?”
The exact amount you will need to retire depends on several different factors, such as how you plan to live during retirement, your recurring expenses, the age at which you hope to retire, and your life expectancy.
According to a survey conducted by “Which?,” retirees in Europe spent an average of €2,400 per month, which translates to approximately €29,000 per year. This amount of money is able to cover basic necessities.
However, if you plan to take travel, cultivate a hobby, or treat yourself to any significant purchases, you will simply need more money. Respondents to the survey reported spending approximately €5,500 per year on traveling and holidays alone. Realistically, we suggest that you prepare to spend approximately 80% to 85% of your salary during retirement. This will enable you to enjoy your retirement without a drastic change in quality of life.
The exact amount of money you will need during retirement will also depend on where you live, as some countries have higher costs of living than others.
Among European countries, for example, Germany ranks as the 15th most expensive country in which to live based on its cost of living index.
The highest cost of living in Europe is found in Switzerland. When preparing for your future, it is important to take the cost of living statistics into account. If you won’t be retiring for many years, you should also consider the effects of inflation.
Use a Retirement Age Calculator to Check Your Pace
One of the most difficult aspects of retirement planning is determining how many years your retirement savings will last.
Once you have a rough estimate of how much money you will need to retire, you can use a retirement calculator to gain more information. These calculators allow you to input certain facts about your financial situation and goals.
Based on this information, the calculator can generate recommendations to help you plan your retirement saving and investing strategies.
Why Everyone Should Use Retirement Calculators
Even if you think you have a good idea of how much money you may need to retire, using a calculator can still provide you with valuable information.
For example, using these calculators can help you determine if your current estimates are correct. These calculators can also help you estimate the eventual outcome of your investment based on certain hypothetical changes, such as adjusting your asset allocation or saving slightly more money each month.
Using a retirement calculator on a regular basis is also an excellent way to check your progress along the way and make sure you are following your plan properly.
If you haven’t stuck to your plan entirely, a retirement calculator can show you how your decisions have affected your ability to retire comfortably.
You can also use these calculators to estimate the changes you will need to make to your retirement plan in order to get back on track to meeting your original retirement goals.
Benefits of a Retirement Planning Calculator
The calculations required to make this determination are intensive. However, a retirement planning calculator can help to simplify the process.
With a retirement planning calculator, you don’t have to do any of the calculations yourself, and you don’t have to worry about making errors.
Keep in mind that these calculators are only providing estimates and do not replace the advice available from a professional financial advisor.
How to Use a Retirement Investment Calculator
A retirement investment calculator is a calculator that allows you to determine how your retirement investments will grow based on their returns and the amount of money you invest.
To use a retirement investment calculator, you will need to know approximately how much money you have invested, how much you can afford to invest in the future and the estimated amount of profit you will earn.
Create a Retirement Savings Plan to Reach Your Goal
Once you have determined how much money you will need to live during retirement, it is time to create a retirement savings plan that will help you reach this goal.
As you develop this plan, remember that you will no longer be earning wages once you retire. You must rely entirely on the income you receive from your retirement savings and investments, so making sure you have enough is imperative.
The specifics of your retirement savings plan will depend on how long you have to save for retirement and how much money you need.
Be sure to set benchmarks for yourself along the way so you can be sure you are on track as you save money. Avoid borrowing from the money you put away for retirement, especially for expenses that are not true emergencies.
Retirement Strategies Everyone Should Consider
Saving for retirement requires careful planning and diligence. However, certain strategies can make it easier for you to save the money you need in time to retire at an acceptable age. Some of the best strategies to consider include:
Paying down debts
If you owe debts, start paying them down now, especially if they have high interest rates. Eliminating these debts early will not only prevent you from worrying about them during retirement, but it will also free up more money for you to save and invest.
Reducing revolving expenses
Nearly everyone has monthly bills. If you can eliminate some of these bills, you will have more discretionary income that you can put toward your retirement savings.
Save extra money
After you have created a retirement savings plan, it is tempting to save no more than the designated amount. However, saving extra money is always a good idea, as it provides you with a cushion in the event of an emergency or other unforeseen circumstances. Instead of wasting your extra money, consider putting it into your retirement accounts.
Start saving early
Some people feel like they don’t need to begin saving for retirement yet because it is so many years away. However, the sooner you begin saving for this important time in your life, the easier it will be to accumulate the money you need. Starting your savings plan at an earlier age may also allow you to retire sooner.
Saving enough money to live well in retirement can be a challenge, especially if you are starting later in your life. However, you can make the process easier by downsizing. For example, if you limit your current expenses by moving to a smaller home and/or making other lifestyle changes, you can put away the extra money for retirement. Likewise, if you downsize your expected lifestyle during retirement, you won’t need to save as much money to live comfortably during that time.
Ways a Retirement Calendar Will Help
A retirement calendar is a calendar designed to help you plan for retirement. You can create a retirement calendar based on your intended retirement age and the current date. Having a retirement calendar is beneficial in several ways, including:
Helping you stay on track
Your retirement calendar is a constant reminder that retirement is coming and you need to stick with your plan.
Providing positive reinforcement for meeting benchmarks
A good retirement calendar will include certain benchmarks you want to achieve as certain times. As you achieve these benchmarks, you can mark them off your calendar and enjoy a sense of accomplishment.
Helping you clarify your plan
Creating a calendar based on your retirement plan is an excellent way to make sure you understand your plan and that it is logical.
What Are the Best Retirement Investment Options?
Different retirement investment options offer different advantages and disadvantages. For example, it is possible to earn a larger profit by investing in the stock market than investing in safer securities.
However, the stock market is generally more volatile than the bond market.
For this reason, most wealth managers recommend maintaining a diversified investment portfolio that includes investments with a variety of different levels of risk. It is also important to reassess your asset allocation on a regular basis and make changes as needed.
In general, your investments should become more conservative as you move closer to your intended retirement age.
In any investment portfolio, fixed income investments like bonds are an excellent addition. Bonds are an especially important part of portfolios for individuals who are close to retirement and need to minimize risks. These conservative investments provide you with healthy monetary returns without high risk of loss. The stability of the profits you will earn from bonds is also high, allowing you to plan for the future more effectively.
In addition, bonds can be bought and sold at any time.
How to Generate Retirement Income with Bonds
Federal securities and time deposits do not provide much opportunity for real growth because of limited returns and inflation. However, a professional selection of corporate bonds can provide you with healthy annual returns.
In fact, over the past six years, Genève Invest has been able to achieve annualized returns of 6% via a fixed income portfolio.
This is due in part to our use of advanced professional analysis when selecting bonds. With the help of modern analytical tools and professional databases, we are able to identify the options that will be most lucrative for our clients.
We also engage in continuous monitoring to ensure that our clients are getting the maximum benefit from their investments at all times.
How to Decide Which Retirement Investments are Best for You
A wide variety of different types of retirement investments are available. Some of these investments provide a greater earning potential than others.
Likewise, certain investments are also more risky than others. Deciding which types of retirement investments are best for your needs can be challenging and requires an in-depth analysis of your current situation and retirement savings goals.
For example, if you are young and won’t be retiring for many years, you can afford to invest in a portfolio with a greater proportion of risky investments. However, as you near retirement age, your investments should be more conservative.
In general, the best way to determine which retirement investments will be best for you is to talk to a professional retirement planning advisor, such as Genève invest Wealth Management.
Safest Investments for Retirement
The safest investments for retirement are those that provide a predictable income or return without a high level of risk. Perhaps the best example of a safe investment is the fixed income corporate bond described above.
Investing in property is also a safer choice than some of the other options available. The best way to determine which investments are truly safe is to discuss your needs with a retirement planning advisor.
A Sound Strategy for Investing After Retirement
Upon retirement, many people are tempted to stop worrying about their investments and simply begin living off the money they have saved.
However, even after you have formally retired, you can still continue to earn more income.
By monitoring your investments carefully and making wise decisions, you can grow your nest egg even as you begin using it for your day-to-day expenses. During this time, you and/or your retirement investment company should continue to evaluate your portfolio on a regular basis and make strategic changes to maximize earnings.
5 Things to Look for in a Retirement Investment Company
Entrusting your finances to the right retirement investment company makes all the difference when it comes to achieving your retirement goals. As you compare different retirement investment companies, remember to look for:
- Client satisfaction rates
- A variety of investment options
- Advanced investment analysis capabilities
Genève Invest is a respected wealth management firm with a proven history of meeting clients’ unique needs.
At Genève Invest, we are proud of the trust our clients place in us, and we work continuously to remain worthy of that trust. Using carefully selected investments, we help our clients to increase their wealth without worrying about volatility or unreasonable risks. We also strive to be available to answer our clients’ questions and address their concerns clearly and quickly.
To begin taking the next steps toward securing your retirement, please click the button below, and schedule a confidential, commitment-free portfolio analysis.