Preparing for Retirement: Why You Need a Financial Plan
Friday, December 9, 2016, 6:00 AM | Leave Comment
Before discussing how to plan for retirement, one must first determine the answer to “why you need a financial plan.”
This makes sense because most people first try to figure out how to plan it without knowing the exact reason/s why they are trying to formulate one in the first place.
Knowing the general importance and personal significance of a retirement plan gives you a more holistic view from which to base your future decisions and direct your financial capacity.
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Volatility in Social Security and Pension Benefits
Acknowledge the fact that government-sponsored retirement funding isn’t always reliable.
As the developed world’s population continues to age, the gap between beneficiaries and workers are continuing to widen accordingly.
This means that fewer working-age individuals are contributing to social security programs.
A comparable pattern exists with other pension programs, such as those in European countries.
In fact, even private pension plans, which are thought to be more secure, are not immune to volatile changes.
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Unforeseen Medical Costs
If your health suddenly takes a turn for the worse, you must be financially ready to pay for medical costs including checkups, ambulance bill, medication, etc.
The effects of illnesses can be amplified by weakened health of retirement-age individuals.
Without your own savings, it will be arduous, if not impossible, to live a comfortable lifestyle.
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More Time to Learn the Ropes of Investing and Saving
Investing isn’t an innate talent that everyone is born with. It requires time and patience to learn, hone, and master.
Having a financial plan at a younger age gives you more time to save and invest in different financial assets including stocks, bonds, IRAs, foreign exchange currencies, and even VC-managed funds.
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Better Capital Growth
Compared with, say, interest rates from a savings account, a financial plan renders the individual with better capital growth over the trajectory of their investing timeline.
Seeking the help of a professional wealth manager, such as Harwood Financial Group, enables you to maximize the returns on your investment through tested and proven wealth management and tax reduction techniques.
They can also help you with asset protection and estate transition planning agendas you may need later as you retire.
Preparing for a retirement is never a menial undertaking. It requires logical judgment, wisdom, and of course a solid financial plan.
These four reasons aforementioned are only few of the many reasons why people opt for a financial plan and why you should be doing the same as soon as possible.
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