Preparing for Retirement: Where do I Start?
Just like in almost any venture (even with long term care), planning is an essential step to reaping success. But how does one accurately plan for retirement? For starters, it all begins by knowing what to look forward to and expect for in the future – which is, safeguarding one’s funds in case something happens. After all, anyone would want to have access to the proper resources and be financially independent once they reach a certain point in their lives.
One of the most important decisions any person can make in their life is to be financially independent, especially during their retirement years. Fortunately for those interested for a comfortable retirement, planning becomes easier once you know where or when to begin. People in their early 20s are mostly not worried about their future years, but time flies fast – overlooked priorities may hit them when at least expected.
To start preparing for the future, you will need to be familiar with the basics of financial and retirement planning. The basics include learning the terms used by industry professionals in order to create a financial or retirement plan.
Here are some of the most basic terms used with financial or retirement planning:
Assets are material objects you possess outright, such as land, vehicles, funds in bank accounts, stock, and valuable jewelry.
- Net Worth
The total value of your assets minus your total debt is your Net Worth.
This is a type of retirement savings account. A 401(k) has your employer deduct contributions to your account from your wages. Until the time you withdraw money from it, the income tax on the contributed amount is deferred.
- Roth IRA
This is an individual retirement plan. Unlike a traditional IRA, Roth contributions are not tax-deductible. An important factor to also consider with a Roth IRA is that it is not tax-deductible.
- Compound Interest
Compound interests is a type of interest earned on the principal amount plus its accrued amount. Compound interest accrues on the principal amount plus any interest generated from the principal amount.
This is an interest-paying debt security and a fixed-term investment. Bonds are bought from an issuer, and the issuer pays you interest in return. Most bond investments follow a fixed term rate.
Stocks are considered as symbols of ownership in a corporation. Stocks are tradable securities, and their prices are subject to volatility.
Long Term Care Insurance and Retirement
Aside from the mentioned insurance terms, having some knowledge of long term care planning is a good way to complement your retirement plans. Think of it this way – retirement is essentially the time you get (and deserve) from working hard your entire life. Which is why having a long term care plan is the best way to safeguard the time you truly deserve, by having the coverage in case something should happen to you. And the best way to plan just for that is by applying for long term care insurance (LTCI).
Essentially, an LTCI will allow policy owners to have the peace of mind that they will be able to function properly during their retirement years. By providing assistance to manage a person’s activities of daily living (ADLs; such as eating, toileting, etc.), the elderly can be assured that their retirement years will be a more fruitful, productive, and relaxing experience.
Also, the need to be covered for long term care is highlighted by the U.S. Department of Health and Human Services: close to 70% of individuals 65 years and above are expected to receive some form of long term care assistance to function properly. An LTCI will not only safeguard one’s assets that can be spent on costly services for their personal needs – an LTC coverage will help policy owners from being a burden to their family and loved ones, by not taking up precious time and resources to look after them during their twilight years.
As such, looking into long term care planning should be an essential step when preparing for retirement. Financial stability and such, just the thought of the importance of being insured can also be a good starting point to prepare for the future (both for retirement and long term care, that is).
So, where do I start?
Now – just reading this piece is a good sign that you are prepared to learn and plan for your future. Being familiar with the retirement terms mentioned above is a solid way to start retirement planning and should help you prepare when dealing with potential consultants. Additionally, starting to think about long term care should augment and create a clearer view on what and how your retirement years should be. Additionally, we can help you reach out to specialists in your area to create an LTC plan that will best fit your circumstances. Request for FREE and no obligation LTC quotes here today.