Retirement Safety

Retirement planning is a long-term process.

Retirement should be cause for celebration. Establishing a financially secure retirement requires years, if not decades of planning. Set retirement goals and identify financial risks to prepare for life into your Golden Years.

Identification

Retirement planning details specific goals related to time, costs and standards of living. For example, your retirement dreams may include downsizing into a South Florida one-bedroom condominium to enjoy weekly rounds of golf. Calculate the amount of monthly cash flow that should be saved to reach these goals.

Features

Safe retirement begins with replacing lost income from your former job. Retirement income may include annuity distributions, bond interest and stock market dividends. Your employee benefits package may also include a pension for retirement income.

Considerations

Some retirees prefer to stay active with part-time work. Part-time consulting and freelance jobs provide additional income for improved financial security in retirement.

Misconceptions

Contrary to popular belief, you should maintain stock exposure to stock market investments during retirement. You may spend at least one decade in retirement, so long-term growth remains important.

Warning

Adjust all retirement income calculations for inflation, which erodes purchasing power over time. The Bureau of Labor Statistics’ Consumer Price Index calculates an average inflation rate of three percent per year.

References

• Investopedia: Inflation
• Investopedia: Investment Income
• Investopedia: Pension Plan

Resources

• Bureau of Labor Statistics: Consumer Price Index