After a long illustrious career that spans decades, it is a life-long savory moment when a once productive member of society, packs their bags and rides off into a secure sunset. However, this is not always the case since planning for retirement for most employees comes as an afterthought.
Michelle Nyandiko, a business development consultant at Enwealth Financial Services takes us through retirement planning and what you need to know.
1. Why is retirement planning important?
Retirement is a stage of life that brings about a lot of change to an individual’s life. Many people associate their value with what they do, therefore, retirement results in a change of how you value and see yourself, your position in society, how you use your time, and remarkably a change in your income. How well you, therefore, adjust to this change has a lot to do with your level of preparedness.
2. How can an individual effectively prepare for retirement?
Findings from a recent research we conducted revealed that only 14% of retirees felt confident enough to retire, while the remaining majority were terrified of retirement based on their level of preparedness.
Preparation has to do with three major things;
Financial security: Saving for retirement should begin as soon as possible, amount
notwithstanding. 10% of your salary saved consistently for about thirty years should be able to replace your salary after retirement, in the form of a monthly pension.
It is also important to prioritize the last 10-20 years before retirement. Restructure your
finances in order to prioritize savings and investments over debt, so that you invest in areas that translate into cash flow.
Housing: It is important that at the point of retirement, your income does not go into paying rent.
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