What Is Retirement Planning?
Investopedia states retirement planning is the process of determining retirement income goals, and the actions and decisions necessary to achieve those goals. Retirement planning includes identifying sources of income, sizing up expenses, implementing a savings program, and managing assets and risk. To measure whether your retirement income goal will be achieved you must estimate future cash flows. Some retirement plans change depending on whether you’re in, say, the United States, or Canada, which has its own system of workplace-sponsored plans.
Retirement planning is ideally a life-long process. You can start at any time, depending on readiness. However, it works best if you incorporate it into your financial planning from the start. That’s the best way to ensure a safe, secure—and fun—retirement. The fun part is why it makes sense to pay attention to the serious and perhaps boring part: planning how you’ll get there.
In the simplest sense, retirement planning is the plan that a person does to prepare for life after paid work ends. this also important not only financially but in all aspects of life. Non-financial aspects include lifestyle choices such as where to live, when to stop working completely, etc. A holistic approach to this planning considers all these areas.
The emphasis one puts on it changes throughout different life stages. Early in a person’s working life, retirement planning is about setting aside enough money for it. During the middle of your career, it might also include setting specific income or asset targets and taking the steps to achieve them.
Once you reach retirement age, you go from accumulating assets to what planners call the distribution phase. You’re no longer paying in; instead, your decades of saving are paying out.