Thinking of Retirement? 5 Most Essential Things That You Must Know Before Retiring

Retirement Planning

Retiring from your job is a big moment in your life. The thought of retiring can be exciting, as well as stressful. Although retirement is like the fruit you get to eat after years of hard work, the fruit it bears should be harvested to the best of its capacity.

One thing that worries people the most concerning retirement is the financial aspect. Everyone wants to reap the benefits and hope that they don’t miss out on any retirement essentials. For that, you should know how to plan for retirement, and if you don’t, it is better to contact an insurance broker. These brokers can offer quality advice on retirement plans. Also, they can answer all of the important questions you may have regarding retirement, such as:

  • How much money do I need for retirement?
  • How much should I spend in retirement?
  • Where should I invest my money?
  • How much should I withdraw from investments each year?
  • How should I fund Healthcare expenses?
  • How should I pay for potential long-term care expenses?

Now, before planning to retire, make sure you consider a few crucial aspects. Let’s take a look at them:

  1. Assess Your Current Financial Position

This is the first step before you seriously consider retiring. It is also essential for those who are looking for early retirement. Take into account all your assets, and then subtract your debts and liabilities. This will help you understand how your financial status looks like and give you a clear idea of whether or not you’re financially ready for retirement. Also, for a peaceful retirement, it is best to get rid of your debt ASAP.

  1. Create an Emergency Fund

Emergencies don’t come with prior notice. When it comes to retirement finances, it can be tricky to handle emergencies. So, it is better to set aside a certain amount from your savings for emergencies. Having health insurance is also beneficial. In the post-retirement, it is ideal to avoid hand to mouth situation.

  1. Plan a Post-Retirement Budget

Now, you need to think about the future and calculate the expected source of income and your expected expenditure. Your post-retirement sources of income may include- return on investment, social security benefits, pension, etc. When calculating the expected expenditure, ensure that you consider medical costs, and retirement plans, and goals apart from day to day spending.

  1. Understand Taxes on Retirement Income

Depending on where you retire, you may need to consider taxes as well. Depending on the country of retirement, if you have paid tax on the money you put in your pension account, you need not pay any tax.

  1. Keep Investing for your Retirement

When there is no source of income, the returns on your investment can be your financial support. So, be regular with your investments.

The Bottom Line

For a happy second inning, you should be prepared for it from a young age. Retirement planning is a step by step process to ensure you have sufficient financial backing when you are not working.

It is best to approach a financial advisor for assistance, as they will address all your retirement queries to help you know how to plan for retirement.

Retirement Planning for Safer, Stable, and Comfortable Living

retirement

Can you imagine living comfortably after retirement? Most people would say yes to this because they will no longer be working in offices full-time. Now, tell us, would you have enough savings to enjoy your life and plan vacations after retirement? Here comes the real dilemma.

 

Most people think about enjoyment after retirement but don’t account for the fact where they will be getting the money from. Some people might say that they will get the service gratuity for that. But is it enough?

 

To be honest, the amount you get as service gratuity is often nominal that won’t even allow you to fulfill basic, let alone it being enough for shopping, vacation planning, and all that you might have dreamt about after retiring.

 

Thus, if you really want to enjoy and live comfortably later in your life, you need to prepare a thorough investment plan

 

What You Need to Know to Grow Your Wealth for Retirement

 

Savings and Investments

There should be enough income flow every month to achieve a financially independent life post-retirement. Steady income flow is only possible when you have savings and investments i.e. you have a sufficient nest egg. You can easily calculate how much you would need for retirement by using our online calculator. Once you have figured out how much you need for your retirement, it is time to figure out how to get there.

 

Diversification of Investments

One has to systematically build up their savings and discipline is key. Based on your risk tolerance and financial goals, you can choose from several investment options available in the market. Remember that “risks and returns go hand-in-hand”. So, don’t put all your savings in one place. Diversify your investments into various portfolios to reduce the risk factor and earn good returns simultaneously.

 

Investing in the Home Country and Foreign Countries

People living in the UAE tend to invest in the UAE itself because the UAE allows ex-pats to invest regardless of their nationality and offers lower taxation obligations compared to other countries. However, you are not restricted to the UAE. You can step into the outside world and consider investing directly in locations like U.S., India, Europe through various platforms and across multiple asset classes. But before investing, don’t forget to factor in tax benefits, security, asset protection, investment cost, and currency fluctuations.

 

When it comes to investing, you have a plethora of investment options, such as real estate, bank fixed deposits or term deposits, stocks, pension schemes, mutual funds, gold, and so on.

 

What to Consider While Planning Your Retirement

 

The Right Age to Start Saving – There is no particular age to plan for retirement. The earlier you start to save, the better your life will be after retirement. It is usually recommended to start saving in your early 20s and 30s because, during this age, people have a higher risk tolerance and can save more because the time to retirement is longer.

 

Determine how much retirement fund you need – You should calculate it based on how much you need to live after retirement comfortably and what plans you have for your retirement. Consider all potential costs, including medical emergencies, routine healthcare checkup costs, and vacation costs based on places where you will want to go. Take inflation and rising healthcare costs into account; otherwise, the amounts you are planning to earn for retirement living might not be sufficient.

 

Apart from inflation, you should also consider taxes because economic conditions are volatile and, sometimes, unpredictable. Besides, you should not disturb your emergency funds as they will help you during critical situations.

 

Risk Factors – Before choosing an investment portfolio, do homework on the risks involved. If your retirement is near, investing in high-risk options could be a huge mistake because the risk tolerance decreases with age and you don’t want to risk your hard-earned money. In case you have 25 to 30 years for your retirement, you have more freedom to explore different options.

 

For a lot of people, retirement could be two to three decades later from now, and thus, they tend to postpone their retirement planning. Eventually, when they will realize the importance of retirement planning, it becomes too late to save and invest much. Thus, start looking for smart avenues and start taking action to prepare the best investment plan after retirement as early as you can.

 

At New Age Insurance Brokers, our expert advisors will help you go through different investment options along with their pros and cons to properly plan for your financial stability after retirement. For more info, email us at info@newageib.com.

Top reasons why you need retirement planning

Retirement planning is the financial support, in form of savings and other physical assets, for financial independence in your old age. It is aimed at giving you a relaxed lifestyle with enough money in your hands so that you can live the way you want without being a burden on anyone else. Retirement planning starts with planning your retirement goals such as where you want to live, how much you want to travel etc., and how you are going to fund them. It is a multistep process conducted over a period of time during your working days so that you can have a secure, comfortable, and fun life after your retirement.

Retiring at 60, cannot be taken for granted anymore. Advances in health care mean we are living longer lives and for long lives, we need more money. So, most people who don’t plan their retirement end up working well into their 60s and sometimes even into their 70s. Working for the fun of it is one thing but working out of compulsion, just because one didn’t plan sufficient finances takes a toll on one’s golden years. It is always a better idea to plan for your financial independence even if you have a supportive and caring family because you never know how people change and perhaps even if the right intention is there, family members may just not be able to support you financially in your old age if they have their own family commitments. Many people suffer a lot during their retirement when they are forced to live alone without proper financial support. This is why you need to be prepared for all kinds of situations and think seriously about your retirement goals.

Retirement planning is the process of identifying your retirement goals, expenses, savings, emergency situations, and your sources of income for a secure and independent life. Here’re some key reasons why you need to plan for retirement.

Medical emergency: Retirement planning means you are planning your life after the age of 60 that means different health problems may arise with rising age and you should be prepared for that. Medical expenses are the biggest financial support that someone needs in post-retirement life. With enough savings and a good medical insurance plan shall mean you will be well-taken care of during any emergency medical condition.

Your pension plan: Private sector employees usually don’t have any state-sponsored pension schemes like government sector employees and they should plan it by themselves. Pension is like your regular income post-retirement to pay for your day to day expenses. You can invest in different investment plans or buy a retirement plan that guarantees monthly pension after your retirement at a certain age. If you are on your own, a pension is like your social security during those days.

You are your own family: Long gone are those days when families live together and support each other. With a rapidly changing family culture, you need to plan for your monetary support and social security to ensure that you will have enough savings for staying separately. In today’s competitive lifestyle, children are also forced to achieve more in their life and sometimes even they have to relocate to another country for their jobs. You should also consider this scenario while planning for retirement at 60.

You can start your retirement planning at any stage of your professional life. The earlier you plan for this the smaller amounts you need to put away to secure your future. The later you start, the harder it gets. Now is a good time for you to start planning for your golden years.  This is the best time to determine your retirement planning goals and investment strategies. You can contact New Age Insurance Brokers and one of our qualified financial advisors will help you with your retirement planning and financial strategies for a secure and financially independent post-retirement life.

Do’s And Dont’s Of A Happy Retirement Planning

Retirement planning is all about ensuring that one is reaping the benefits of working hard during their younger years. It means that one is able to live a life of dignity and respect, that one is able to do things in their final leg of life that they just did not have the time to do.

Despite retirement being an inevitable phase of life, many of us don’t prepare for it. We tend to overestimate the time available to us to plan for our retirement. So, when retirement is actually around the corner, most of us are underprepared. This results in either working for more years than we actually planned on working and/or compromising on the quality of our retirement life.

This is validated by data that we currently have. In the UAE, a survey led by HSBC found out that only 44% of UAE citizens feel that they will be comfortable after retirement. 63% of them responded they plan to work even after retirement to some extent.

In this guide, let us walk you through the do’s and don’ts of retirement planning in Dubai and why it’s imperative that you have a plan in place.

The do’s of Retirement planning

1.      Decide what kind of retirement you wish to have

Setting clear goals is the first and foremost thing one should do. These goals will be unique to each and every person based on their current lifestyle and what is it they envision for their future. So ask yourself questions about which part of the world do you want to retire in; where is it that you want to retire: your home or a retirement home; how much do you want to travel; what are the kind of things you would do with your time etc. While you may not have exact answers to these questions now, starting to think about them will help one to start visualizing your golden years.

2.      Decide how much money you would need

Once you have defined clear goals, one can do the number crunching on what kind of money is required to achieve that life you have envisioned for yourself. While you are calculating the total costs, do not forget to factor in inflation. Having goals along with knowing how much money is required to achieve those goals will help make retirement planning easy, and moreover, predictable.

3.      Start investing early

The sooner you start putting money aside towards your retirement, the higher the likelihood that one will be able to achieve their retirement goals. Time is a wonderful thing that helps even small amounts of money compound into large sums of money over a period of time. The later you start, the more the amount of money is required to be put aside to achieve your monetary goals, if you don’t want to compromise on your dreams.

The don’ts of Retirement planning

The don’ts of retirement planning is all about staying away from financial decisions that will hurt your retirement savings. We will discuss the key points below.

1.      Don’t be overconfident in your earnings

Being overconfident in your earnings is a very easy mistake to make. Economic cycles go up and down and along with that one’s ability to earn. So saving up for the rainy day is very important so that you don’t dip into your retirement savings. In addition, there is a common misconception that the more you earn, the more you save, but that is rarely the case. We raise our standards of living along with our earnings which means that our savings remain stagnant and don’t necessarily rise with our earnings. So always keep an eye on how much you earn and how much you save. If you earn more, make sure to save more.

2.      Don’t overspend

Overspending can burn a hole right through your savings in no time. In other words, don’t put want ahead of needs. Make sure you are spending within limits and not getting into the vicious cycle of debt.

3.      And did we already mention, don’t wait for the last moment?

Time is money. Don’t wait for the last moment, start planning for your retirement today.

The golden years await…

Retirement planning is not something that can be done in a day or two. It takes years of planning and saving. But the result is totally worth it. And getting the right guidance at the right time is very important.

New Age Insurance Brokers can help you in that regard. We have one of the largest portfolios of retirement plans from various companies. The experts at New Age Insurance Brokers will help you find retirement plans suited to your requirements. Contact us today to know more!