Basics of Retirement Planning

Retirement planning is probably the number one reason why people do personal financial planning. Most people like to daydream about the things they hope to do someday when retire. Making those dreams come true is an important part of the retirement planning.

There is a lot information available on this topic, sometimes I think too much. However, it is important to remember that your retirement goals and objectives are unique and should not be based on a "cookie-cutter" approach. This is one area that you should not be cutting corners. Retirement planning is an interactive process of clarification and adjusting of goals as our lives unfold and new circumstances evolve. 

Mapping out a retirement plan is particularly complicated for today’s middle-aged baby boomers. They face financial pressures that other generations have not had to deal with - such as supporting kids in college while at the same time providing help to aging parents. This squeeze forces many to postpone retirement planning. Also, the current situation of our economy has put undue pressure on their retirement planning.

Another mistake that should be avoided is treating retirement planning as purely an investment planning exercise. Even though the financial aspect of the retirement planning is critical there are other factors that must be taken into consideration. As our lives  unfold, new circumstances emerge, new values are embraced and new emotions may develop. The retirement planning process is a delicate balance between the financial and non-financial  realms. According to age, personal characteristics, and circumstances, the range of applicable investment tools varies too. For example, annuities are not  for the 30 years old, while sector funds are not for people in their seventies, even though there are both good financial vehicles.

Because of what we have discussed here, it important that retirement planning be started early and be reviewed on an annual basis. There are many ways to develop a proper retirement plan, do not allow that your plan to be designed around the goals and objectives of another person, you wont be happy with the results. Finally, a sound plan requires the ongoing counsel of a financial professional who can help you obtain your retirement objectives.