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By Herb Lazarus
One of the rules of life is that, sooner or later, everyone
has
to stop working and retire. For some, this is a golden
opportunity to enjoy life and do things they never got the
chance to do while they were busy with working and raising a
family. For others, however, retirement can be a very scary
prospect, with no money coming in and yet some of the biggest
expenses still needing to be taken care of. Even though work
stops, the truth is that life (and your bills) doesn’t. Here
are some ways to plan ahead and develop a secure source of
income for when you retire.
The most important factor in planning out your retirement
income is to plan ahead- the sooner you start to plan, the
better. As soon as you reach that stage of life where you are
receiving a secure income, you should begin to put money aside
in order to draw off of when you retire. You can do this by
diversifying your investments- small contributions to several
areas will add up when you retire to provide you with a
comfortable living- if you are very wise and frugal you may
find that your retirement income is actually more than your
regular working income was!
The best places to put this money are in areas where they will
be able to accrue interest, especially of the compound
variety.
Some safe investments include mutual funds and saving bonds,
in
which an investor agrees to leave the money aside for a stated
amount of time in order to earn the interest that will often
be
guaranteed. In some areas, it is also possible to invest in
Registered Retirement Savings Plans (RRSPs) which will not
only
accrue interest until the time you retire, they are also
usually
tax deductible in the present.
You should also look for a job in which a regular contribution
is made by both the company and by yourself to a pension plan.
Ask your employer if it is possible to have some money
deducted
from each paycheck and deposited to a specific pension plan-
many employers will meet the contributions made by the
employee.
The most important thing when you are planning out your
retirement income is to make sure that the money you invest
for
that purpose remains there. Many people lose their retirement
nest egg in emergencies or even investing in opportunities
that
seem iron clad, but aren’t. When you make investments towards
your retirement, do not touch them. Remember that this money
will be all you have at that time in your life, and if you
lose
it you are going to be in for some hard times, with no chance
at
recuperation. Any risks as far as investments go should be
undertaken with money that you budget for that purpose, and
not
with any of the money that you plan on setting aside for
retirement purposes.
Prudence and long-term planning are the watchwords when you
begin to develop your secure retirement income. Make a plan
and
stick to it, and your golden years will be the best time of
your
life.
About The Author: Herb Lazarus maintains a website dedicated
to
retirement planning at: theretirementplans.com
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