By Christopher Cervantes, RFP

MANY young people avoid discussing the issue of aging, believing that ignoring this reality might make it go away. Same thing with the failure to prepare funds for your children’s education; putting retirement preparation under the rug may lead to regret. However, there is a wisdom behind “living in the now.” Yes, you cannot do anything about the past, you can only learn from it. But the worry-free future will only happen if you know you have some grip on it.

For many, lack of well-thought retirement planning leads to several risks, including potentially running out of money during retirement, thereby forcing you to become a burden to your children who might also be struggling in starting their family.

It’s never too late to start being responsible for our future. As early as now, understand precisely how much income you will need in the future to maintain your lifestyle. During financial planning, most of my clients have no idea how much money they will need, or they underestimate their needs. You must consider that maybe by the time you decide to retire, you will still be paying your mortgage, and on top of that, you must factor in your travel expenses, budget for charity, health care costs, paying for the real estate tax, insurances, etc.

After seeing all your future needs and obligations, you must lay down your strategy on how you will be able to live life for the next 30 years or so after you retire without a paycheck. Unfortunately, those who fail to plan are forced to live in a less desirable lifestyle that is much different than when they were still working, which I’m pretty sure is not your ideal way to reward yourself after working so hard for more than 30 years.

We might be doing our best to set aside for this critical phase of our life but don’t know where to put our hard-earned money. The stock market can provide a fantastic return, but it can also be counted as the leading cause of significant losses. On the other hand, putting your money in a high-grade bond typically generates modest returns but will allow you to sleep well at night. The question is what type of investment is right for you. You may consider your investment risk assessment result, but another approach is by considering your investment timeline.

It is good to buy stocks if you are still a long way to your retirement, but as you age and get closer to your golden years — the year you need it to convert to income — shift gradually into bonds and limit your stock exposure.

In the absence of retirement benefits from most companies nowadays, people need to invest for themselves. Don’t allow your busyness in growing your career as an excuse to lose the chance to increase your future income once you leave that high-paying job. With this, investment funds and plans become an essential tool for financial planning, wherein you can buy and forget it. Some retirement investment funds are available right now, wherein you are investing in a mutual fund with insurance. Then, once you reach your target retirement age, it will automatically be converted into a fixed income pension without worrying about the market’s volatility. Therefore, even with how busy you are with your family and career, you can always find time to take care of your golden years. If you have difficulty starting for this goal, looking for an excellent financial planner might be a good way to start.

A responsible parent will ensure that their child will have a regular visit to a pediatrician while growing up, but the time will come that your child will need to shift to a doctor with a different specialty. The same thing with hiring a financial planner, you need to look for someone who specializes in working for retirees.

When it comes to retirement, it’s never too early to prepare for it. Retirement has nothing to do with age; it’s about your savings. So, start reviewing and updating everything on your finances and legal documents as early as now. Get your affairs in order.

These are just a few crucial steps to consider planning and acting if you want to retire gracefully and make the most of your golden years.