How to Become Financially Independent After Retirement

by Laura Benson
(United Kingdom)

As most people approach retirement, financial independence is usually their major objective. Once we realize that we are turning 65, ideas of financial independence become s ramped. Unfortunately, a number of these ideas are disturbing. The ideas are usually in form of fright attacks specially if the retirement benefits are not appealing.

While these concerns disturb everyone aging, especially the single ones, becoming financially independent is most vital for their future survival, if they need a happy retirement. Employed for nearly all of your life, good financial retirement should be a reward for your hard work. But if the bank account is empty, then you need to ensure that they are filled so that the following retirement years are enjoyed.

Financial independence requires a good financial planning. It does not matter whether one would be retiring in the next 5 or 20 years but prior planning is important. That would automatically improve your future financial standards.

Why do we require a Retirement Planning?

• People think that a perfect retirement is a combination of comfortable vacations, leisure activities and financial independence-all of these things are achievable only if you have sufficient cash when retiring.

• To live a relaxed life after retirement, you require financial planning. There are a lot of ideas and resources present to help for a better planning. This includes;

What are the essential steps of Retirement planning?

• The amount of cash you require after retirement depends on your present level of living.

• You need to estimate what your yearly operating cost will be after retiring.

A point to be in use for this financial estimation is the variation between current and retirement expenditure. For example, right now a big proportion of your salary goes towards children’s education or house mortgage. But by the time you are retiring, your kids must have established their jobs and you would own a house of yourself. So it is advisable to keep a good retirement plan to be able to maintain the rising level of inflation in the future.

How much would one require saving?

After calculating the income that might arise from part time jobs, interest on the investments and Social Security; you require approximating the precise value that your resources will contain and the returns you will get after retiring. By scheming this, you would realize the deficit. Here, there are a lot of factors to be considered. These include; the duration of living (depends on individuals health), retirement age and the profits on your present investment. Age and number of years to live determine the number of years of the retirement. While determining the rate of profit on your investment, take your time and calculate the profit based on a percentage of about 5 to 6. This would make it possible for you to calculate the total sum of cash you need to save after retiring.

Ways of building the retirement corpus

Once you have known the total sum of money required to be saved each month from then till your retirement, the preceding step would be to find a considerable plan that is exact for your saving wants. Preferably, you should organize for a specific sum that is instantly withdrawn from your monthly income and automatically directed to your investment plan. This kind of deal reduces reckless spending habits. It is advisable to go for a payroll deduction plan or savings plan.

DWP provides social security agreements on some types of benefits that an employee can claim during retirement. This can add to your financial security thus when retiring you are assured of work benefits.

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