Nowadays a happy retirement no longer means to sit with your own feet up and watch the rest of the world. To many people, a happy retirement suggests embarking upon a new world of adventure. But in order to make the post-retirement journey smooth, you need to develop a good retirement plan. It would help you to have a happy, wealthy and healthy retirement.
What is a Retirement Plan?
A retirement plan is a financial arrangement which is designed to replace your employment income after your retirement. These plans can be set up by the employer, or the insurance company or government. You can also take the help of a professional financial expert to guide you to design your retirement plan. They would generate a pre-retirement calculator which would enable you to determine how well you are prepared for retirement and what can be done to improve your retirement outlook. The government promotes the retirement planning process by offering a favorable tax benefit to a wide range of plans. In the United States, the federal tax aspects of your retirement plans are based on the provisions of the Internal Revenue Code. These plans are governed by the Department of Labor under the provisions of the Employee Retirement Income Security Act (ERISA).
Advantages of a Good Retirement Calculators
The retirement calculator helps you to re-evaluate your preparedness to retire from employment on an ongoing basis. Changes in economic climate, inflation, achievable returns should be taken into consideration while using a retirement calculator. Here are a few advantages of using a retirement calculator.
• Ascertain the Income you require on Retirement
A good retirement calculator helps you to ascertain the income which you would need for retirement. If you are years away from your retirement then you need to take a host of things into consideration while using a retirement calculator. For example, would you have a mortgage at the time of retirement? Do you need to support your dependent kids or parents? In general, many analysts recommend generating a retirement income of 70 to 100% of your present income. It is always better to use the higher end of the range while designing your retirement income when you have good discretionary income. The retirement calculator can guide you to fix this final retirement income. Personal financial planning services like plan.co.in would help you with your investment plans in order to secure a sound retirement kitty.
• Helps to find the rate of return on retirement savings
A good retirement calculator helps to assume the rate of return on your retirement savings. The assumptions for the rate of return should match with the methods you have used to invest these savings. If you have used stocks and bonds as an investment, you can assume a 6% annual rate of return. If you invest in mutual funds with expenses above 0.50%, you have to reduce your expected rate of return. This would, in turn, increase the amount you need to save.
So, this was, in brief, the advantages of using a retirement calculator. The financial experts of iplan.co.in would guide you to design a good pre-retirement plan so that you can enjoy a healthy and wealthy retired life.