Planning For Retirement

The very moment a working person crosses 40 years of his life, he or she starts panicking about the retirement and starts retirement planning. Though retirement should be planned long before, may be when the person first started working. This is for the reason nobody knows what comes up next in life and one should always have contingency plans made up a head. Anyhow going back to the main point of discussion that is retirement, it is very essential to evaluate your investment options accurately. There are number of investment plans designed for retirement purpose by many investment firms. Their investment portfolio is mainly focused on ensuring financial soundness of the investor after retirement. Advertising sessions are packed with retirement commercials, offering range of investment options by different financial institution. Financial Institutions come up with variety of packages suiting to investors need for return and appetite for risk and all of them have their own competitive advantages which makes it difficult to choose one. But in the end retiring person is the one who is supposed to make decision for his future.

There are certain factors which may help designing your own or selecting a retirement plan for yourself. These factors are how much money is required post-retirement, what is current income, tax slab, expenditures, etc. Though circumstances could change and there should always be Plan B for it. The second step towards retirement planning is deciding in which assets to invest in or in other words asset allocation. One can select from fixed income, equities, instruments or cash, or may have a chunk of every security pertaining to their risk and return, hence driving a retirement portfolio.

General rule of thumb for retirement investing is that one subtracts his age from 100 and put it in the equity while remainder should be used to invest in fixed income and cash. Mostly retirement plans like 401 (K) are mutual fund based whereas ETFs are also better options as they a broader focus on the industry. There are numbers of top performing mutual funds, bonds, stocks, etc, which would be discussed in the next post.