Planning a Trip after Retirement: The Financial Side

One of the biggest appeals of post-retirement is the possibility of traveling and seeing a lot of new places around the world. However, traveling is generally not cheap and a lot of planning should be made to make sure retirees can afford it. So what steps should be made?

First, look around. Is there anything in the house that cannot be left behind for too long? The entire schedule of the trip depends on this, as much as the cost of the travel depends on the schedule.

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Image source: http://www.retirementredux.com/

Once the schedule is finalized, the question of how healthy the nest egg is comes into play. A healthy savings can shoulder a trip or two for a month. But if retirees want to stay in world-class hotels in cosmopolitan cities, then the bank account should match the retiree’s expectation.

Another option for retired couples is to move out of their home and into a more affordable place. They can either sell their home or have it rented out. This way, their bank accounts are replenished, giving them means to travel.

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Image source: http://www.drsayyar.com/

Retirees also have to consider their limitations, and think about what to do once they decide it’s time to come home. So, before going on a trip, retirees should have something to come home to.

There is a great amount of freedom to be had after retirement, and experiencing the sights and sounds in far corners of the world is as good an endeavor as any. But as in all endeavors, careful planning is always paramount.

Linda O. Foster from Poulsbo, WA, specializes in federal employee benefits. She helps in estate and retirement planning for people who want to reach their financial goals. To learn more about how Linda Foster helps retirees save money, visit her company’s website.

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Planning a Trip after Retirement: The Financial Side

Investing Your Retirement Money In Growth Opportunities

Image source: careersbusiness.co.uk
Image source: careersbusiness.co.uk

Planning for retirement is never easy. It is a long-term process that requires a lot of effort and smart decision-making. Knowledge about the essentials of retirement and investment is a fundamental step to determining which processes and growth opportunities to pursue. While hiring a financial consultant introduces a system in the planning process, the investor should still be apprised of crucial points like finding a passive income, avoiding fad investing, being tax efficient, and thinking about long-term benefits.

Retirement planning is done best during youth and gainful employment. For instance, putting money early on Individual Retirement Accounts (IRAs)—basically a savings account with big tax breaks—gives people tax advantage. Although people under 50 can deposit only to a certain limit per year, the account still carries importance in terms of savings.

Similar to this platform is the 401(k) plan wherein an employee decides how much would be deducted from his or her payroll as contribution to an individual account that his employer creates on his behalf. The employer serves as the primary sponsor and partners with another company to manage the plan.

When people reach retirement, there are more ways to grow their accumulated savings, namely through stocks and bonds. Investing in stocks is as simple as buying shares of a company, making you a co-owner and gaining a portion of its profits. Stocks have high return potential and are beneficial for beating inflation in the long term. However, they also have greater risks in the shorter term.

Image source: forbes.com
Image source: forbes.com

Bonds, meanwhile, are a much more stable investment. Purchasing a bond is like lending money to a reliable borrower. The borrower pays interest on a regular basis and then recoups the principal when the bond matures. The downside includes the risk of the borrower defaulting and less potential returns compared to stock investment. For more convenient options, retirees can park their money in mutual funds, which are stocks- or bonds-based pooled investments managed by professional investment experts.

Linda O. Foster, a Washington-based financial expert, coaches her clients on the best way to reach their financial goals and enhance their retirement plans. For similar articles, subscribe to this blog.

Investing Your Retirement Money In Growth Opportunities

The Five Basic Steps to Retiring Wealthy

Planning early for your retirement is key to achieving long-term financial goals. The process is quite extensive but need not be too demanding or exhausting. It may seem like a tall order, but it can actually be done in simple steps that you can confidently accomplish (with proper discipline, of course):

Hand holding a Retirement 3D Sphere on white background.
         Image source: bankingsense.com

1. Decide at what age you would like to retire. Setting the time to bid goodbye to employment will give you enough opportunity to start building your nest egg. At any age, however, saving for retirement should start 20 to 30 years earlier. So if you wish to retire at age 60, start planning at age 40 at the latest.

2. Determine how much you will need for retirement. Calculating for your future financial needs as a retiree does not require complex mathematical equations. Retirement income will largely depend on variable factors such as your current earnings, your desired kind of lifestyle, and even unforeseen events like illnesses and medical expenses. For the best estimate, however, it will be of great relief if you seek the help of a professional financial planner to assist in computing for your ideal retirement fund.

3. Build your retirement fund. While stashing cash in the bank is not necessarily a bad idea, it would make more sense to park your money in more high-yielding securities such bonds, stocks, UITFs, or mutual funds. These investments are quite risky in the short term, but they have consistently shown massive returns over time.

4. Know what resources you have. After identifying the size of the fund that you need for your retirement and deciding on which money machine to use in building the fund, now it is time for you to check on where to source the fund. The most common source is your current employment or business. Discipline yourself in allocating a comfortable portion of your income for your retirement on a monthly basis. Other sources that you can also consider are bonuses, commission income, existing savings, liquid assets, or even inheritance if you have received one.

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       Image source: toolsformoney.com

5. Periodically review your retirement plan. It is very important that you reassess your retirement plan every now and then. Make necessary adjustments especially that life has plenty of surprises that would often force you to rethink your finances.

Linda O. Foster is a Washington-based federal employee benefits specialist specializing in estate and retirement planning. For more about her background, click here.

The Five Basic Steps to Retiring Wealthy