A pleasant retirement means having a good income
and tranquility to be able to enjoy life, reaping the fruits of what we have
sown over a working career. However, the path to achieving this goal is often
tortuous due to a lack of retirement
planning. A phase that should be rich in experiences can become a cycle of
frustration and anxiety.
In this article, I'm going to talk about the seven
fundamental pillars for you to ensure proper retirement planning and have a
more peaceful future life.
1.
Contribute to social security
It is necessary to be aware that social security,
whether in its own or general regime, is an important strategy within
retirement planning with John Labunski, especially
for those who are starting a process of building up financial reserves.
Not only will the income you will have in
retirement be important, but other factors should also be taken into account,
such as an income that may be needed in the event of unemployment, maternity,
illness or disability.
Therefore, there are some fundamental elements of
social insurance that I consider important to contribute, even if it is the
minimum payment.
2. Have an
investment portfolio
The second pillar, also quite traditional, is to
count on investments. The investment portfolio is the traditional construction
to complement the insufficient income that the SSA will provide us in the
future. In this way, retirement planning will involve a contribution to social
security and a complement to this contribution with your personal effort,
through investments.
The assembly of this portfolio must involve good
choices. So study your investments very carefully. Sometimes a 1% a year
difference in profitability may seem like little in the first year, but over 25
years it's a difference that can double your capital.
3. Assess
your lifestyle
In addition to investments, we must consider a
lifestyle change. By moving 60 kilometers from where you currently live,
wouldn't it be possible to live with a better quality of life and perhaps a 30%
lower cost of living? Even if you are a little away from your children,
grandchildren and loved ones, it is something to consider.
Being rich is not just about those who have more,
but mainly about those who need the least. If you need less in the future, you
will be more relaxed in terms of using your assets and the pressure to build
them.
It is necessary to understand that life allows
adjustments when we realize that we are not destined to live forever where we
currently live. You can find situations that provide a much more interesting
quality of life, sometimes not too far from where you live.
4. Have
financial benefits with your property
The strategy of using your home as part of your
pension may face some resistance in United State, but in other countries it is
already much better considered, even in legal terms.
Resisting the idea of getting rid of a property
can be a big mistake in your planning. It is very common for people to realize
that they have built little financial reserve for retirement. Personal
problems, health issues, unforeseen circumstances, children's education, in
short, some events occurred during life, and the only thing left as an asset is
the property.
Using the previous point mentioned (review your
lifestyle), perhaps you can consider selling this property. One option is to
buy a much smaller property and convert the sale value into a portfolio of
dividends and thus with the income from your portfolio to fund your lifestyle.
Or opt for a reverse mortgage plan — when you transfer your property to an
institution and receive an amount, either in full or in installments, with the
condition that the property will be owned by that institution when you die.
5. Insurance
contracting
Protection is a fundamental pillar for a good
retirement. If we start building our wealth late and realize that we are not in
a position to guarantee something for the family in the event of an unforeseen
event, perhaps even a step before investing is negotiating a life insurance
policy.
If for some reason you die or become disabled in
the next few years, what kind of protection does your family need? That's why
it's important to take out life insurance and, contrary to what many people
think, you won't increase protection as you increase your income.
As your wealth grows, you will be better able to
maintain your family's standard of living and thus reduce the coverage you need
under insurance policies.
6. Rethink
work
Another important point to highlight is work. We
talk about retirement planning to face a situation in which we want to stop
working. If you strongly desire to stop working, this may be a sign that you
are out of balance.
You are probably dissatisfied with your career, but
you face this sacrifice to provide comfort for your family. As this sacrifice
is making you sick, you can't wait to end it when you retire.
On the other hand, when retirement comes, you may
feel a very uncomfortable feeling. After all, after decades in a work routine,
being productive and receiving your recognition, you suddenly find yourself in
a vacuum, where you no longer have routines and obligations to fulfill. This
feeling tends to lead to a bout of depression or anxiety.
It would be much more interesting to start
preparing a few years in advance for another activity. It may not be as
profitable as that career you've developed for years, but it will provide some
income and pleasure.
Remember that when you formally end this career,
when you apply for the SSA and start receiving the benefit, you are retired,
but not prohibited from generating income.
7. Get
organized
It won't do any good to have a good investment
portfolio, contribute regularly to the SSA, take out good insurance and,
suddenly, in a moment of fatality, not being able to communicate with the
family to make a decision. It is very common that wrong decisions are made in
these situations, deconstructing what was being planned correctly.
The main reason is the lack of organization.
Whether with guidance on which lawyer to talk to, which insurance company to
call, which strategy is being discussed with the investment advisor, etc. It is
important that all this control is presented to the family in a clear and
organized way.
Live: 7
steps to plan your retirement
Conclusion
The idea of saving good money and living off of
it is valid. However, I believe it is more interesting to lead a balanced life,
take care of your productive capacity, and optimistically adjust your plans to
the idea that you will work much longer than most people expect to work.
Be less in a hurry to retire and more in a hurry to
identify what is important to you. Adjust your budget to spend more on what's
good for you, simplifying your financial life, maybe even buying a house
further away from the city.
Spend better, get organized, save enough or even
less, but qualify yourself to be a better person who will enjoy your
professional activity and surprise others with a greater capacity for delivery.
