Retirement planning is an important part of living comfortably

The First Steps Toward Retirement Planning

Retirement is a time to enjoy life, and that can be possible if you have assets to cover expenses and allow for spending. The time to start working on retirement is early in the beginning stages of work and career. The key to a financially secure retirement is to have adequate resources to live on in the style you wish. The major sources of retirement resources are Social Security, pensions and annuities, investments, and savings.

Saving Options

Savings must begin early to accrue maximum benefits. The beauty of savings is in compounding interest which, when added to the sum, creates more income. This phenomenon of growing savings is a key to a solid economic foundation for both career and retirement. A major source of concern for retirement planning is debt. Consumer debt can erode the ability to save. Some consumers see too late how much of their earnings go to things without lasting value. Clothing, expensive dining, and compulsive shopping on gadgets are great for the economy, but that spending reduces an individual's or family's prospects for long-term growth. The contrast in value of money saved as opposed to money spent on momentary impulses can be astounding. With the same amount of spending, you can accumulate a collection of out-of-date clothing or a substantial nest egg that in turn produces a larger amount of savings simply by the passage of time.

Forming the habit of saving early in life is a critical part of retirement planning; you can best begin saving early, in the 20- to 30-year old range if possible. The extra years of compounding interest will pay handsomely in retirement. The habit of planning is also a substantial benefit for the young as they look to the future. For example, knowing that you need $400,000-$500,000 in retirement savings to live on is valuable information. If you assume that a company pension will be enough, it can be a rude awakening when the company goes out of business or goes to new owners who then reduce or cancel benefits. Planning is a basis for taking responsibility for future outcomes rather than relying on chance.

The basic retirement plan, then, can be a savings program, such as a 401k, and a company based pension or employer contribution, along with investments and savings. Investments can be job-related. Some companies offer stock options to employees on favorable terms. Another form of investment is insurance, policies with cash value can be a substantial asset for retirement. You should consult with an estate planning professional to explore the benefits of trusts and other forms to protect assets and reduce taxes.

Quality Health Insurance

Health and health insurance are retirement tools. You cannot guarantee excellent health, but one can invest time and resources in staying as healthy as possible. There are enormous costs associated with long-term health care. Many conditions are avoidable by minimal steps like a healthy lifestyle, a balanced diet, regular exercises, and regular medical checkups. Drinking alcohol in excess, obesity, sedentary lifestyle, and smoking tobacco can lead to serious health problems and seriously expensive healthcare. Enjoying retirement can be much more rewarding if one also enjoys sound health.