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Personal Finance Planning for Investment and Retirement

Saving money in advance for your retirement is only the first step to ensure a financially secure future. At this juncture, all you need to consider is the best investment plan for your retirement.

Here are a few best ways that you can consider while planning for your investment and retirement:

If you are planning for a long-term investment then it will be best if can invest 12% from your gross income or just 10% is also sufficient as per your affordability criteria. However, you must have an additional retirement plan besides these savings. For instance, if planning for short-term saving, you can invest 4% of your gross income and if planning to save for kids then you can invest 2% of your gross savings.

Do not forget that you would require additional fund for miscellaneous and emergency things and situations. So, you can invest in emergency fund and ensure peace of mind.

When you will reach the age of retirement, you would require nearly 75% to 80% of your pre-retirement income to lead the same life as you were living before.

Here, the most preferred alternative is to 17% of your net income or only 12% of your gross income if that is suiting your requirements. However, if you are going closer to retirement then you may consider investing 20% to 30% of your gross income. You can also consider investing in stocks and mutual funds that can help you give good returns on your invested funds.

Always remember the thumb rules:

  • If your retirement is at 60 years, invest 10% of your income.

  • If your retirement age is early, invest 20% of your income.

  • If you are in your 30s, it is advisable to save 15% on your leisure and comfort activities, 20% for luxury and 10% for basics.

  • If you are more than 30 years of age, it is wise to invest 5% more in each of the above mentioned categories.

Today’s economy is such that it is now harder for people to think or plan for their retirement. However, taking out some funds in advance from your pocket on a regular basis is the easy way to save a good amount for your future.

You can look for a financial consultant to help you find the best investment and retirement plans for your life. Thus, you must make the most of your funds in the early stage so that you could reap the benefits in the later stage.

When you want to secure your future, planning for your financial expenses in advance is a smart way to lead a stress-free life till and Finafter your retirement.

So, what are waiting for? Remember the thumb rules and considering your gross income and future requirements, invest the most appropriate percentage of your financial income.

Saving your money today will enhance your ability to spend more even when you will not be working. Ensure your future independency right now and do not let the precious time pass by.

Featured image License Some rights reserved by 401(K) 2013

Carol Gibson
Carol Gibson
Carol Gibson is an expert author who regularly writes about Finance, personal finance and Technology. With her articles she wants to share her knowledge about Money Tips. She welcomes any questions or comments you might have on her posts.
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