Creating Your Own Retirement Plan

by Anza Goodbar
(last updated November 22, 2011)

Life expectancy is longer now than it has even been. So the funds needed to retire have gone up as a result. It is important to start planning early for your retirement years so you have the opportunity to build the wealth needed to live out your twilight years in comfort.

The first step in creating a retirement plan is determining how much you'll need to live on once you stop working. Most financial advisors say to plan for 30 years. It is important to take in consideration the lifestyle you want to live once you stop generating income. If you have planned well, your living expenses will be relatively low. Hopefully your mortgage will be paid off and you're in good health.

The next step would be to consult with a financial advisor. It is never too early to sit down and chart a course. The more time you have to save for retirement, the more risk you can build into your plan. Everyone has a different threshold for risk, after speaking with an advisor; you will need to determine where your comfort level lies. It is good to have a mix of high, medium and low risk investments in your portfolio. The younger you are when you start planning will determine how aggressive you can be in your risk assessment.

Keep in mind you should have a mix of stocks, bonds, mutual funds and cash. In case you need money quickly, you will want to have some liquid assets available on short notice. This mix will change as you grow older and approach retirement.

Annually, sit down with your advisor and go through your portfolio. Make adjustments as needed. Use the power of compounded interest in an account that you will not touch until retirement. Each year the compounded interest will grow based on your increased balance. The longer you have to contribute the more benefit you will realize.

Don't put off planning for retirement. Your lifestyle in your retirement years will be a reflection of the planning and follow through you invested in your working years. The root of all financial plans is having a good budget, the discipline to follow it, and a propensity for saving for the future. Live within your means and put any surpluses into savings. Set your goals for financial freedom in your retirement years and measure your progress annually to stay on track.

Author Bio

Anza Goodbar

Anza is a single mother of four who makes her home in Colorado. She enjoys writing, hiking and is an avid football and hockey fan. She is the owner of a virtual business services company; writing is just one of the many services her company offers. ...


Using a Curling Iron without Damaging Your Hair

Using a curling iron on wet or damp hair can result in fried limp hair. Use thermal protectors to prevent heat damage.

Discover More

Getting Your Credit Report

Today more than 50% of all credit reports have errors. You are entitled to a free credit report annually, take advantage ...

Discover More

Broccoli Ham Ring

A broccoli ham ring is great way to use holiday leftovers in a unique and tasty dish. It is a nice alternative to a ...

Discover More
More Money Tips

Preparing for Retirement

Preparing for retirement is an important step, and one that shouldn't be put off forever. While it is true that it is ...

Discover More

Maintaining Your Lifestyle on a Retirement Income

Considering that the average life expectancy has been rising over the past several years, planning for retirement is ...

Discover More

What is Early Retirement?

What is early retirement? While most people think that they know what this is, not very many people know how they can get ...

Discover More

If you would like to add an image to your comment (not an avatar, but an image to help in making the point of your comment), include the characters [{fig}] in your comment text. You’ll be prompted to upload your image when you submit the comment. Maximum image size is 6Mpixels. Images larger than 600px wide or 1000px tall will be reduced. Up to three images may be included in a comment. All images are subject to review. Commenting privileges may be curtailed if inappropriate images are posted.

What is one more than 6?

There are currently no comments for this tip. (Be the first to leave your comment—just use the simple form above!)