The Retirement Planning Process Summarized

The retirement planning process has been defined and re-defined for decades by many people. During my retirement planning I accepted the fact that the process has been defined and that I should stick to the book – so to speak. Ten years into retirement, I know that 'the book' was based on some flawed assumptions.

Given the fact that you are reading this page means that you are at least mildly interested in the retirement planning process. My guess is that you are between fifteen to ten years from retirement. It was certainly during that period in my life that I got interested (no – perhaps the word 'serious' would be better) in and about the process.

I think the defined process, 'the book', erroneously make the assumption that you and I were interested and serious about our retirement planning during our entire career. I certainly thought vaguely that I did all the right things during the early years of employment. But looking back I realize that I pillaged my retirement provision accounts whenever it was legal to do so!

I'm going to attempt to summarize – without boring you with detail - what the retirement planning process should be:

Take stock
Wherever you are in your financial planning, take stock. Of your current expenditure, your debt, your assets, your retirement provision plans, and your investments. An exercise that I did was to analyze exactly what I spent every month for the past twelve months. This was very sobering. I was exceeding my budget every month!

Define your objectives
At what age do you want to retire? (Be flexible and realistic.) Define the lifestyle you would want to have in retirement.

Based on your current expenditure, and adjusted for inflation, what would your retirement income need to be?

Based on family history, current health, and published statistics what is your life expectancy?

When do you expect to liquidate your home equity or any other assets?

Implement
Scrutinize your current retirement provision plans. Know exactly how much it would contribute towards your income at retirement. Increase your contributions to get the maximum tax deferred benefits and tax free income growth. This you need to do in spite of your current financial commitments.

If not already there, get out of debt. Even if it means moderating your lifestyle! Channel all your savings into a portfolio of annuities, retirement funds, and possibly property for rent.

Your investment portfolio can start off as being aggressive, but over the years you need to change it gradually until it is conservative by the time you retire.

You need to adjust your insurance to cover you as per your objectives.

For the implementation phase I seriously recommend that you get an independent, qualified, and experienced retirement investment advisor.

Manage
Unfortunately no retirement plan can be left on cruise control! You need to manage it on a monthly basis. Again, it is much easier if you can do the management in conjunction with your advisor.

Re-visit
Times and situations change. You need to re-visit your retirement plan regularly, also during retirement. You need to monitor that your objectives remained the same, and you need to adjust your entire plan if not. You need to make sure that your savings are on track to provide you your desired retirement income.

On this Website I researched worksheets, spreadsheets, income planners, calculators, handbooks, etc. Do visit these pages. It could help you through the retirement planning process.

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