Financial Planning Benefits – Retirement Planning Strategies

Share This Post

A vital part of each budget is a retirement projection mapping out the kind of lifestyle that the customer would love to appreciate, and the way they will receive their objectives.

The strategy for retirement planning depends upon several important factors:

1. The customer's present age.

2. Size of the nest egg.

3. Anticipated retirement date.

4. Desirable lifestyle throughout retirement, along with a projected life expectancy.

Other factors to consider would be the speed of return the customer's investments can reach (both prior to and after retirement), just how much the customer can bring about their nest egg before retiring, and also the consequences of inflation.

How can these factors come together to make a valuable instrument for your customer?  Let us presume the customers are 55 years old, aim to retire by 65, and would love to keep their standard of living through retirement that requires $60,000 each year.

The customers anticipate a total of about $40,000 each year in Social Security payments, so that they will want the inflation-adjusted equal of $20,000 annually to fulfill their demands. These are the truth.

Now, conservative assumptions will need to be made. Though the stock exchange has averaged a speed of return of 10% during the previous 100 decades, an expert financial planner may assume that the clients can attain an 8 percent yield until retirement, along with a 6 percent return during retirement.

Moreover, the planner may presume inflation will average 3 percent annually. In the end, even though the 55 year old customers are likely to reside until age 90, the planner will presume that they will live to age 95 –after all, the objective is not to run out of cash.

Tags : |

Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>