Retirement Planning

What is retirement planning? Well, the concept is as general as estate planning (and they are very similar). But to explain what it is, let me first explain what estate planning is so there is no confusion.

Estate planning is planning how your estate will be handled upon your death. How it will be distributed, who it will be distributed to, and so forth.

Retirement planning is planning for your retirement (simple!). The specifics of planning for your retirement vary from country to country, but you should have some government certified account for you. In Canada this is an RRSP. In America this is your 401(k). Chances are if you're even close to becoming a senior citizen you already know your nations' equivalent.

Regular contributions to your retirement fund are essential to proper planning. Ideally, by the time you have moved out and have started your career you should also start your regular contributions. Most contributions towards retirement are tax deductible too, which is always a plus!

A lot of people fall behind on their contributions, so how can you overcome this? Talk to your bank (or if you're up to it, try online banking) about setting up repeating contributions. This way money is automatically transfered from one of your accounts to your retirement account.

Now what about the 'd' word? Diversification! Proper planning should make sure your money is safe, and the easiest way to do this will be to diversify your funds. The old adage, "don't keep all your eggs in one basket" holds true. No better reminder of this should be the recent credit crunch and housing bubble collapse. The more you diversify the safer your investments will be.

Retirement planning isn't all dollars and cents though. Once you retire you will be in an entire different stage of your life. In fact, 43% of recent retirees said that adjusting to retirement was difficult.

A lot of seniors entering retirement don't know what to do with all their free time. So how can you avoid this? Still keep yourself busy, but now on your terms. You no-longer have to work a 9-5, so you'll have a lot of time to spend on activities that you'll enjoy. Take some courses at the community college or local university (although these courses can be expensive). Pick up some hobbies, make connections with old friends.

Retirement, and proper retirement planning, is an important thing in everyone's life. Make sure you're prepare for it! Both financially and emotionally.

Income in Later Life - Provides internet and "real world" ideas to help people in laterlife supplement their income.

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