Retirement planning should be started at the earliest possible time, and so should the savings for it. Here are some guidelines by experts on retirement plans:
- Reach out to a fee-based financial advisor: Fee-based financial planners practice with independence and objectivity and, most importantly, have a minimum conflict of interest as they do not receive compensation from product sales. Experts on retirement plans suggest hiring a financial planner with at least 10 years of experience in the industry.
- Develop a retirement risk management strategy: There are different risks associated with retirement planning, like longevity risk, earning surprises and market volatility. Thus, an integrated and cost effective plan must be developed now using investments and insurance to shelter yourself from such risks
- Manage your debt to stay out of debt: Saving yourself from debt is of utmost importance, and without proper management, you are likely to accrue debt, which puts you further into debt. You must strategically pay out the most expensive debt first, like credit cards, and avoid taking loans, as being burdened with debt is the last thing you need during retirement.
- Discuss retirement goals: Such discussions with experts on retirement plans will give you clarity and cut down on complications, thereby giving you a final goal, which is (most importantly) realistic and achievable within your time horizon, and the roadmap to achieve the same.
- Map the 3 important aspects: To get a better focus, write down the three important aspects:
- Your savings target.
- Your preferred retirement investment options.
- Your retirement savings goal.
Such mapping will dramatically increase your chances of higher returns and greater safety of funds by giving a clear-cut goal.
Consider a mix of broadly diversified low stock and bond funds based on your risk tolerance to achieve your savings target, say experts on retirement plans.