Planning For Your Retirement In 2014

Image source

Retirement is one of those life milestones, with millions of Americans thinking about and planning their retirement at any one time. For a generation, 2014 will be the year they finally retire from the workforce, to live out the rest of their lives in leisure. For others, it will mark the first time they think about retirement, and about setting money aside for their future. In 2014, planning for your retirement is essential to make sure you can live a comfortable existence when you are no longer earning money on a regular basis. But what steps should you be taking to plan for the future, and how can you specifically plan ahead for your circumstances in retirement?

Before you can start to put plans in place to provide for your pensionable years, you need to think about how much it will cost to survive in your current lifestyle. Write down your essential living costs every month, and calculate this figure over a year. Be sure to be generous in your estimations, so as not to be caught out by initial optimism. Calculating this annual amount will allow you to work out a total amount you need to secure to fund your retirement, and you should make calculations based on a long and healthy life post-retirement. This figure is still abstract, thanks to the effects of inflation, but it gives you at least some idea of the amount of money you will need to have access to in order to fund your retirement.

Image source

Fortunately, this doesn’t have to be a lump sum. Private employer pensions can be set up long in advance, and many people of working age already pay in to pension schemes in order to set aside some capital for their retirement. Similarly, investments you make during your working life can continue to pay you into your retirement, so there are many practically positive reasons for getting your excess money tied up now for that future. The sooner you start to plan ahead with your financial affairs, the more benefit you will be able to see from your money when you retire.

Pensions and savings schemes are often linked to market performance, and as a result, capital can decrease as well as increase. However, this money is often treated in a more tax-efficient way, and investment in the right pension or savings vehicle will ensure these risks are kept to a minimum. Ernst and Young global chairman Mark Weinberger and other executives understand these topics well, but so can you with the right amount of research and planning.

Retirement is an inevitable stage in each of our lives, and one that most people look forward to. Leaving the workplace forever is daunting, particularly in the current uncertain climate. But with the right planning and preparation ahead of the event, it can be possible to retire with enough money to live comfortably for decades to come. Whether you have pension provision in place, or whether you’re considering starting to save for your pension in the new year, planning well in advance of the event means you have the longest runway to ensure a happy, financially-sound life beyond the workplace.