Retirement planning strategies eventually converge because it shares a common goal: To have enough money in your retirement accounts by the time you retire to provide for you and your spouse during your retirement.
The best strategy remains to start your retirement provision plans early during your career. You benefit from the power of compound interest, cost averaging, untaxed income, deferred taxation, and all the benefits designed to make retirement provision attractive.
The elements that put this strategy under attack are numerous. The urgency to seed away as much as possible is not always communicated effectively, and when times get tough it is far too easy to borrow against your provision plans. Debt is too readily available and often enslave you very early in your career to a lifetime of debt servicing. The pressure of our society to become a big time consumer is enormous and retirement provision becomes the last priority on the agenda.
Retirement planning strategies depend on the time during the retirement provision process that you are in.
The next planning strategy would be to catch-up. You would examine every retirement provision plan you have and ensure that you are contributing the maximum allowed, that your employer is contributing the maximum allowed, and that you take-up any incentives the government offer. For this strategy you would probably be between fifteen and ten years from retirement.
It is the time when the lack, or inadequacy, of earlier retirement provision hits many of us. It was certainly the time that I got serious!
If your retirement planner still shows a projected shortfall by retirement, you need to consider several alternative strategies. Is another income stream possible? Can you moderate your lifestyle?
Any savings must be channelled to retirement annuities and retirement funds. It might be a good time to look for an independent, qualified, and experienced advisor.
Prepare for retirement
This retirement strategy change happens usually some five years before retirement. It is almost too late for catch-up. Your retirement income planner would be able to show fairly accurately what your financial position is going to be at retirement. You might even have to modify your strategy and postpone your retirement.
At this time it is prudent to consider liquidating some of your assets in the future to bolster your retirement savings.
A strategy that you should embrace as early as possible is to educate yourself and understand the dynamics of retirement provision plans. On this Web site we discuss many issues for your edification. Eliminate uncertainty and take control of your own retirement planning.
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