Retirement Planning Stages

2/15/2016
Your financial plan will be reliant upon many factors: income, family composition, assets & liabilities, goals and ultimately, your life stage. 
Planning for retirement is an essential part of your financial picture. Whether you are just starting out or retirement is within reach, having a cohesive plan will help take the stress out of eventually stepping off. 
Retirement today is more than just a matter of accumulating enough money. Increasing life expectancy has made retirement an extended stage of life. Here are the different stages of retirement and what you need to do.
Achieving 
Early in your career is the perfect time to start a habit of saving for retirement because you have one huge advantage you’ll never get again…TIME.
When you’re starting out in you career, it can be difficult to even imagine retirement. It seems so far off! Managing student loans, rent, car payments and basic bills can be overwhelming with an entry level paycheck.  But if you start early, you will truly be ahead of the game– time is your greatest advantage at this stage in the game. 
Every rand invested early in life can grow, through the power of compounding, far larger than the same dollar invested later in life.
Look at it this way: Time will either work for you or against you when saving for retirement, and it’s a lot easier when time is on your side.
Growing 
At this stage, you’re likely full stride into your career and your income probably reflects that. Priorities shift and all the sudden you’re thinking about college savings and spending money on everyone other than yourself. 
Time is still on your side, though you’ve begun to lose some of your compounding power. Try to invest a minimum of 15% of your salary towards retirement.
Resist the temptation to ignore your retirement. Just remember, would your children rather take out loans or have their parents move in with them later in life? This is an important trade off to understand.
If you decide to take time off to raise the kids, consider increasing retirement contributions before you leave and when you return to make up the difference. 
Preparing 
Investing at this stage typically needs to be a little more cautious. Time is starting to work against you, since you have fewer years of earning power to make up any losses.
With retirement upon the horizon, this is the perfect time to gear up and make those extra contributions.  If you’re age 50 or older, you may be able to take advantage of catch-up contributions. 
This may also be a good time to consult with your financial adviser to make sure you are on track to meet your retirement goals.  Try to boost your retirement savings goal up to 20% or more of your income. Ideally, you’re at your peak earning years and some of the major household expenses, such as a mortgage or child-rearing, are behind you, or soon will be.
You can start to discuss your healthcare needs, investment allocation, tax circumstances and estate planning. 
TIP
Don’t cash out your pension fund or other employer sponsored plan when you change jobs. roll it over into a self directed retirement plan, such as an IRA, or transfer it to your new employer’s retirement plan. Remember, you will need this money when you retire.

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