There is no right age to start planning your retirement. However, it’s a good idea to start your retirement plan from your first job by doing some wealth management. Typically, you include your sources of income, the estimated expenses, percentage of savings from your salary, asset management, investments, and future cash flows.
Then you also have to decide on where to live, at what age you will quit your job, and even potential medical expenses.
If all of those seemed overwhelming, you could try a DIY retirement planning software. The software will break down all your tasks in easily digestible pieces for your convenience.
Planning your retirement involves three stages in your life:
- The first stage is the asset accumulation phase. From the moment you get your first salary, you immediately take out a certain percentage for savings. You can read up on the 50/20/30 rule by Senator Elizabeth Warren on how to budget your money. The more active your accumulation of wealth is, the earlier you can meet your retirement plan goals.
- The second stage is when you set clear financial goals and find ways on how to fulfill them. For instance, you can take out a mortgage for your first home, invest in real estate, and check the financial markets.
- The final stage is when you enter the retirement age. At this point, you’re already cashing in on your investments. You start to distribute your wealth to your heirs. If you have a business, you begin transitioning the company for the next generation.
If you planned well—with the help of a retirement planning software—then you can sit back and enjoy your waning years.
If you still have not decided on where to retire, Las Vegas is always an option, and you would not be alone.
Las Vegas is a favorite destination among retirees. According to the Las Vegas Review-Journal, in the five years between 2011 and 2015, the number of retirees settling in Sin City averages 17,939 every year.
Factors to Consider When Planning Your Retirement
Here are some considerations that you factor into your retirement plan:
- Debts -- If you have incurred student debt, now is the time to come up with a repayment plan. Even if you have invested well, you will have little left to enjoy your 401K if most of it goes to debt reduction. Manage your credit card expenses, so the bills do not accumulate.
- Income -- If you’re on your first job, it’s understandable that your wage would be low. However, you should have a short-term, medium-term, and long-term plan for your career. Five years from now, you should have a goal of how much salary you would have earned by then.
- Shelter -- Call it your “forever home.” You have time to invest in a house that can be your retirement home. Real properties are also a good investment if you have some excess cash. In the same vein, you may consider assisted-living homes if you do not want to live in the house alone.
You do not have to hire a financial advisor to plan your retirement. You can try a DIY software where you can plan your retirement at your own pace.