Can you really average out the need of your retirement?

When you take up the life of an average Canadian, you will see that he gets retired at the age of 65 and much prior to this retirement he keeps planning for the same. There are investments plans, savings and many other ways that he banks upon to protect his retirement days.

The gnarl calculation is based upon the assumption that he would live for may be 20 more years after 65 that is after his retirement. But, the studies have indicated that it could go beyond this and hence he or she needs to prepare and plan the expenditure for 30 years later than retirement.

Calculating the needYou can apply the rule of 4% which suggests you to make withdrawals at a rate of only 4% of the investments you have made; at least this percentage should be followed in the first year. If you follow this rule you can tell yourself that things would be bright and healthy for you in terms of money, for another 25 odd years.

Another way to calculate the need is to see your needs, keep the calculations in mind and then plan for 15 times of the same. This would keep you on safe track.

Building up a portfolioWhen you build up a portfolio, make sure that 50% of the investments are made in Bonds so that you can reduce the chance of risking your money. Rets can be invested into stocks, or other ventures that are quite aggressive on return fronts but hold their own share of risk too.

The sources you can depend uponIf you have been regular with RRSP and other retirement schemes, then you can surely bank upon them for menorah support. You can always set up plans that would keep trickling cash for you from time to time.

The discipline you need to maintainMany a time’s people start spending too much immediately after retirement. When they look at the bulk of money they find it to be too large to get exhausted or consumed over the next two or three decades. Therefore, they don’t restrain themselves from spending whenever and wherever then want to. But, this is actually the time when you need to spend in a disciplined way because there could be a sudden expenditure coming your way which could really extract a lot of money from you. A person preparing for retirement should be disciplined about reinvesting the returns on investments he has already made; this would help maintain a healthy growth of the money.

Preparing for retirement might seem to be an uphill task, but if planned and executed well it would not be one. One needs to look into various factors, make calculations with a little critical brain and assume a lot of odds coming during retirement days so that he can plan accordingly. Expecting something unexpected while planning for retirement is the key to a happy and independent retirement.