Envisioning Retirement

Until your mid-30s, your financial outlook likely remains short-term. Your priorities include keeping savings and investments accessible for purchases such as a home. You may have a retirement savings plan in place, but retirement income is not of utmost concern at this point. If you are over age 35, you are probably more interested in retirement planning. Your priority is to protect your earnings, maximize your investments, build wealth, but also reduce your income taxes. As retirement approaches, you are presumably still concerned with amassing investment earnings, but will make less risky financial decisions. You may invest less in stocks and more in CDs, where the rates of return are guaranteed. Your focus is on how you will be spending your retirement. During retirement, the emphasis will most likely remain on safe investing. You want to protect your assets and will make more conservative investment decisions. The goal is to ensure you have enough retirement income to live comfortably.

Retirement Goals

What do you want to do when you retire? Travel the world? Move to another community, city or country? Spend time at your recreational property? Pursue an education? Start a business? Devote your time to volunteer work? Purchase a new car or home? Do you prefer dining out regularly? Do you attend theatre or music events? Do you covet fine art? Are you a stamp, coin, jewelry, book or car collector? Do you support and contribute to charities? Do you have grandchildren? Do you have an active lifestyle? However you decide to enjoy your retirement, your retirement planning strategy will play a major role. It can impact how much or how little you accomplish during retirement. Depending on the lifestyle you wish to maintain, most financial experts will advise you to consider building retirement income that is 60% to 80% of your current income. How large your nest egg will be is determined by what retirement means to you. Retirement planning involves negotiating a balance between your goals and the expenses they may incur. In the previous section, you may have discovered a gap between the two. The next section will examine some of the ways you can bridge this gap and avoid the erosive nature of inflation and taxation.

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