Once the need for planning is realized, the actual concept of retirement planning begins. It is a process of determining the financial goals at the point of their retirement. It involves keeping aside sums to ensure that funds are available and these funds are invested in the appropriate areas to achieve the goals set. Further, the process requires constant monitoring of the progress of the plan and then taking adequate remedial action where required in order to set right any deviations that might seem significant.
Setting goals is key and this has to be done while keeping the individual’s needs in mind. The amount required to achieve the goals must be calculated and the way in which they will have to be invested must be determined.
The big idea is that an individual has the required funds after he retires from active life to meet a certain standard of living.
The retirement plan is exclusive for each individual and it is not enough that there be a common retirement plan for the entire family or for even people who might seem to be similar or part of a certain group. This is because the needs of each individual will be different and hence what they need in the retirement plan will also change, accordingly. How this impact the individual is a separate issue, which has to be kept in consideration during the planning process.
What does the individual want to do after retirement? Is it to relax all day at home and read a nice good book? Is it to go golfing on the greens? Or, is it to go on a tour of the European resorts? Each individual has his own dream and many work for it their entire life. But having a dream and then putting aside some money is not enough. A retirement plan is the best way to set you on the course for future benefits years down the line.