Will my money outlast my working years? This is a question bothering many of us. The dilemma forms a core of our society; the inherent fear that we may have to live on nearly nothing once we are retired. There is good reason to assume so and the precarious footing on which Baby Boomers find themselves today only strengthens the argument.
Of course, things may not pan badly at all if only we are a little circumspect in planning our retirement. If we pay heed to the fact that retirement, after all, is an inevitable result of working all our lives and the day, however far it may seem, will arrive for sure.
Are we paying heed to the retirement budget?
When we save, we either go too fast or too slow. While ‘slow’ can hurt’, with ‘fast’ the problem is that the steam may run out. Ideally, while saving, we should always concentrate on a monthly retirement budget. Won’t we be more confident about our bearings if we knew what the amount we are saving may translate into on a later day when we retire?
Country’s economy over 3 decades
The phase of retirement does not arrive in the second year of our working lives. It comes after we have put in 30 years or more. This means that we are talking about the economic conditions of a country for something like 3 decades. So it is not hard to fathom that your retirement plan may be hit hard by economic volatility, tax implications, inflation and global cues. So, when you plan for the big years ahead, always budget for these difficulties. These are like the occupational hazards you cannot shy away from.
Are bonds a good investment?
It is not a bad idea to depend on your bonds but going the ‘bond’ way solely may hurt. There is a misconception that bonds cannot make losses. Newsflash- they can! So depending upon the interest rate and the period of holding, you may fetch less than what you had anticipated once you retire and this can hit your retirement plan hard.
Humans are always apprehensive about what they have to face for the first time. Retirement is one such event in life. But there is a smart amount of case study on it which says that people can run smoothly and beautifully through their retirement years if they give enough consideration to the planning bit.