Retirement planning, in a financial context, refers to the allocation of savings or revenue for retirement . The goal of retirement planning is to achieve financial independence.
The process of retirement planning aims to:
- Assess readiness-to-retire given a desired retirement age and lifestyle, i.e., whether one has enough money to retire.
- Identify actions to improve readiness-to-retire.
- Acquire financial planning knowledge.
- Encourage saving practices.
Why is it important to plan for your Retirement?
Importance of Planning for Retirement. Personal planning for retirement is one of the most important financial planning because it is the determining factor of your satisfaction with your retirement lifestyle. Financial retirement planning is crucial because it identifies your sources of income and expenses and establishes your retirement budget, based on your personal plan.
Tools for Retirement Planning :
The Retirement Planner will help you understand how much you need to grow your wealth before you retire and how to plan for it.
- Expenses in first year of retirement : Estimate your cost of living in retirement.
- Value of current assets at retirement : How much do you think your investments will value when you retire.
- Fresh investments required : Estimate how much you need to save monthly to meet your retirement goals.