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8/11/2019 Basic Concepts of Retirement Planning
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RETIREMENT
PLANNING
N. Vyshnavi
A. Jayadeep
P. Harsha
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Retirement planning, in a financialcontext, refers to the allocation of
finances for retirement. This normally
means the setting aside of or other toobtain a steady at retirement. The goal
of retirement planning is to
achieve financial independence, sothat the need to be gainfully employed
is optionalrather than a necessity.
http://en.wikipedia.org/wiki/Retirementhttp://en.wikipedia.org/wiki/Financial_independencehttp://en.wikipedia.org/wiki/Financial_independencehttp://en.wikipedia.org/wiki/Retirement8/11/2019 Basic Concepts of Retirement Planning
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process of Retirement
PlanningStep 1: Identifying your financial and
retirement goals
Step 2: Analyzing your current
financial situationStep 3: Risk Profiling
Step 4: Asset Allocation
Step 5: Investment Allocation StrategyStep 6: Periodic Monitoring and
Rebalancing
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The process of retirement
planning aims to;Assess readiness-to-retiregiven a
desired retirement age and lifestyle,
i.e. whether one has enough money to
retire; and Identify actions to improve readiness-
to-retire.
Acquire financial planning knowledge Encourage saving practices
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Benefits of Retirement
Planning Retirement planning helps you maintain your
desired lifestyle during old age. It helps youplan for key life stage events leading up toretirement. It provides financial security to
you and your dependents by enabling you tomake prudent investments during yourworking years. It also enables you to makethe best use of your hard-earned money postretirement. One of the key benefits ofeffective retirement planning is to cover forany contingencies arising from uncertainevents which can compromise your ability tomeet your financial goals.
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Some investment options
Stocks
Bonds
Government saving bonds
Treasury securities
Mutual funds
Real estate
Retirement plans
NPS
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Some saving options
Savings account
Certificates of deposits
Money market funds
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Top 10 Ways to Prepare for
Retirement1. Start saving, keep saving, and stick to your goals
2. Know your retirement needs
3. Contribute to your employers retirement savings
plan
4. Learn about your employer's pension plan
5. Consider basic investment principles
6. Don't touch your retirement savings
7. Ask your employer to start a plan8. Put money into an Individual Retirement Account
9. Find out about your Social Security benefits
10. Ask Questions
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7 Golden rules of retirement
1.Save 10% of your income for retirement2.Increase investment as your income grows
3. Don't dip into corpus before you retire
4. Withdraw 5% a year initially, then step up
5. 100
age = Your allocation to stocks6. Borrow for education, save for retirement
7. Save 20 times your annual expenses
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The 7 Biggest Retirement
Planning Mistakes
1. Assuming you have control overwhen you quit
2. Ignoring the tax impact ofdistributions
3. Not saving enough for medical costs
4. Failing to lock up lifetime income
5. Failing to lock up lifetime income
6. Underestimating longevity
7. Drawing down retirement savings toorapidly
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Would You Rather Have, A
Million Dollars Today, Or APenny That Doubles Every
Day For Thirty Days?
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I Hope You Choose The
Penny!!!
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