Key Factors in Retirement Planning (2024)

FAQs

Key Factors in Retirement Planning? ›

For many people, it's not just about the money. There are other key factors to consider in addition to finances, including lifestyle, family, health, and community involvement. It's important to assess how prepared you are today and know the steps you may need to take before you're ready to make a decision.

Retirement planning should include determining time horizons, estimating expenses, calculating required after-tax returns, assessing risk tolerance, and doing estate planning. Start planning for retirement as soon as you can to take advantage of the power of compounding.

It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount you withdraw to account for inflation.

Embrace the 30X thumb rule: Save 30X your annual expenses for retirement. For example, with annual expenses of ₹25,00,000 and a retirement in 20 years, aiming for a ₹7.5 Cr portfolio is recommended.

Here are some of the most common retirement planning mistakes: Not getting an early start. Reducing your savings over time. Agreeing to support adult children.

Creating a retirement plan begins with determining your long-term financial goals and tolerance for risk, and then starting to take action to reach those goals.

What are the 3 R's of retirement? ›

Three R's for a Fulfilling RetirementRediscover, Relearn, Relive. When we think of the word 'retirement', images of relaxed beachside living or perhaps a peaceful cottage home might come to mind.

1. Contribute the Maximum to a 401(k) If you have an employer-sponsored retirement plan, you could consider taking advantage of it and contributing as much as you can, but certainly up to the company match, if there is one. For 2024, the 401(k) annual contribution limit is $23,000, up from $22,500 in 2023.

4% rule calculation. Start by adding up all your investments, retirement accounts, and residual income. Calculate 4% of that total, and that's the budget for your first year of retirement. After each year, you adjust for inflation.

William P. Bengen is a retired financial adviser who first articulated the 4% withdrawal rate ("Four percent rule") as a rule of thumb for withdrawal rates from retirement savings; it is eponymously known as the "Bengen rule".