Welcome to our Retirement Planning Calculator! It’s an excellent tool for examining your current retirement plan’s effectiveness. For more information on the calculator and retirement planning, see our informative article below the calculator. Thanks!
Will You Have Enough Money for Retirement?
Have you ever wondered if you’re on track to a comfortable retirement? Get a little nervous thinking about it?
Don’t fear. You can confront the truth with our Retirement Planning Calculator and test out hypothetical scenarios. Turn your concerns into knowledge, and your knowledge into action!
At Truth in Financial Planning, we’re going to give you a game plan for retirement. Let’s start by exploring when you should start thinking about retirement contributions . . . .
Build a Foundation First
Before you even think about contributing toward retirement, we advise building a solid foundation. Consider the words of Jesus:
Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash. – Matthew 7:24-27 NIV
In the same way, your finances need to be built starting with a solid foundation. Yes, investing for retirement is important, but having a foundation for the here and now is more important.
Alright, so what’s that foundation?
We like to call it Phase I: The Foundation Phase. Follow the link to learn more about this phase in detail, but we’ll summarize these steps for you here:
- Create a budget and save $1,000 cash.
- Get appropriate insurance policies.
- Personalize your estate plan.
- Pay off all consumer debt.
- Save 3 to 6 months of expenses in an emergency fund.
Why do we advise starting with these steps before contributing toward retirement? Here are a few of the most important reasons:
- Without a budget, you won’t know how much you can afford to contribute toward retirement.
- Without appropriate insurance policies, you might find yourself relying on retirement accounts to cover major bills for flooding, medical procedures, and more – therefore paying early withdrawal penalties.
- Estate plans ensure retirement – among other – assets go to the right people in case of your death.
- Consumer debt crushes your ability to invest, and many times, you’ll pay more in interest on debt than you’ll receive from investments.
- Emergency funds provide a liquid, penalty-free resource for cash when disasters strike. Without one, you might find yourself waiting for stocks to sell – not to mention you’ll incur fees.
Okay, so you’ve laid a foundation, now what?
Use the Retirement Planning Calculator
During Phase II: The Accumulating Wealth Phase, it’s time to start thinking about retirement planning.
Use our Retirement Planning Calculator to compare what you will need during retirement with what you will have if you continue on your current financial track.
Remember, if you don’t like the results, you can increase your contributions or lower your retirement income expectations. You can also easily change economic assumptions such as the estimated inflation rate or annual income growth rate. Play around with it.
If you find that you need to increase your retirement income, there are several steps you can take . . . .
How to Increase Retirement Income
Use any or all of these strategies to increase your retirement income:
1. Find Extra Work
Another job goes a long way in providing income for retirement. Not only may your employer match contributions in your 401(k), but you’ll have extra income you can use to build your retirement fund.
Side businesses are another great way earn more money for investments, as you can work them in the early mornings or at night – before or after your day job.
2. Learn About Investments
Educate yourself on investments. Learn enough to make wise decisions.
Fees can eat away your investments, although they are worth paying if the benefit outweighs the cost.
Look for investments with long track records. Avoid volatile stocks. Find better rates of return.
3. Cut Some Expenses
Remember that budget you started in Phase I? Systematically lower your expenses over time until you feel a bit of a pinch. Use the extra money every month to put toward your investments.
4. Meet with a Certified Financial Planner™
A Certified Financial Planner™ can help you navigate the stock market, giving you examples of stocks that are likely to do well in the future. They are there to educate and guide you into a better retirement.
Your Certified Financial Planner™ will take a step back and look at the big picture of your finances. They’ll answer questions you didn’t even think of to ask. You’ll be held accountable to your financial plan, and that’s always a good thing!
Retirement planning should always be done in the context of general financial planning. It’s not an isolated endeavor. Everything must be considered at one time.
Life changes. Emergencies happen. Income needs rise and fall. There are many moving pieces to this puzzle.
Start by using our Retirement Planning Calculator, and then contact a Certified Financial Planner™ who can help you design a game plan that works. You’re not alone. We’re here for you!
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