Retirement: it’s coming towards you all your working life, but have you planned for it?  Do you have a 401k, an annuity and a plan for how much you’re going to need? Or are you like one-third of Americans who have nothing saved for their retirement? Many people who start to look at retirement planning find the array of options so bewildering and complex, that they are paralysed by confusion and end up doing nothing, so how can you avoid falling into this trap?

The Cost Of Your Dreams

How do you envision your retirement?  Do you want to move closer to your children, retire to Florida, or take up fishing?  You can’t begin to plan for you retirement unless you know what you want your life to look like in your golden years.  Once you’ve thought about that then there are many calculators avalaible online to help you forecast how much you’ll need, or you can consult an independent financial advisor to guide you through the process.  Don’t be put off by this important step – many people vastly overestimate how much they’ll need to achieve the lifestyle they want, and once you know how much you need you can put a plan in place to get there.

401(k) Or Annuity? 

Either a 401k or an annuity could provide a reliable revenue stream during your retirement, but you need to do some careful research (or use an independent financial advisor) to decide which would be right for you.  Employers often offer 401(k) plans which may have added benefits such as tax savings, or employer matching of contributions.  Annuities have gotten a bad rap in the past for not performing and leaving people without the money they put into them, but a new generation of fixed annuities are now offering guaranteed returns.

Unlocking The Value In Your Home

One option for raising money for your retirement is to use your home – you could refinance, reverse mortgage or downsize to release equity, potentially giving you a good chunk of cash to play with.  One thing to bear in mind here is that house prices can go up as well as down – some markets still have not reached the peak highs of just before the 2008 crash – but generally they do trend upwards, given enough passing of time.

Rebalance and Diversify!

However you decide to finance your retirement, whether through your home, a pension, annuities or stocks, remember that most experts agree on two things: firstly, that the closer you get to retirement, the ‘safer’ your plan should be – if you’re two years from retirement you should not be investing in high-risk stocks, so make sure to check in and re-balance your plan regularly.  Secondly, diversification is the single biggest thing you can do to safeguard your retirement pot – never put all your eggs in one basket!