A personal financial plan is essentially important for any person and their loved ones to minimize future hardships and difficult financial situations. Short and long-term financial freedom and stability is something an individual wants to have through to the end of his or her life. Financially planning for one’s retirement years is vital so a person does not sustain major unhappiness or unnecessary pain in what is supposed to be the reward for working so hard in their younger years. Developing a thorough financial plan is a process that comprises a comprehensive analysis of a particular individual’s financial position and their long-term commitment to apply and observe the set financial plan through one’s life. The plan includes but not limited to, how an individual spends, saves monies and invests his or her financial assets. It encompasses knowing how to budget, manage cash and taxes, borrowing of funds, the use of credit cards, minimizing risk, investing and planning for retirement. Such a plan also requires a vigilant thought process for the future so he/she can tweak their financial plans as needed due to changes in lifestyle and economy. Financial planning involves short and long-term investment strategies. A short-term strategy is one that an individual would want to see results in one to two years. “Most investment advisors say your first short-term goals should be getting your financial house in order by eliminating credit card debt and establishing a rainy day fund” (Mutual Fund Store, 2014). Mutual Fund Store explains that intermediate-term and long-term goals includes buying a house, starting a business, and retiring according to each person’s own schedule and lifestyle. Prior to saving and investing for one’s... ... middle of paper ... ... stock fluctuations. If a financial advisor cannot be afforded, it would have been in the best interest of the investor to read more on the stock market news regarding what stocks were predicted to have a profitable growth. The investor could have stayed with energy and renewables, just cold have chosen different corporations then the ones chosen. Personal financial planning eventually leads to secured retirement years; this is the purpose to plan for the future. With a volatile and erratic economy, and social security benefits undetermined in regards to having enough money to comfortably survive after retirement is critical. There is no magic ball to tell us what the coming years will bring; this is why it is up to each individual to have their own financial lives under control. Having a concrete financial plan now will secure an increased comfortable future.
People of all ages should begin planning for retirement and managing their money well so they are ensured enough income when they do retire. Retirees estimate that people will need 71% of their pre-retirement income to maintain their current lifestyles. Stocks and 401(k) plans are recommended.FactsNonretired Americans with household incomes that average more than $50,000 assumes they won't be able to retire until age 59.More than a third of affluent retirees with children and grandchildren are helping to support them financially, as are 29% of all retirees. Also, nearly a quarter of all retirees whose parents are alive are helping them financially.Fully 48% of the affluent who aren't retired as well as of all people surveyed who aren't retired believe they have to work part time in retirement.
For most Americans, retirement has become a lifelong goal. To retire comfortably, you need income, and this income can come from one of three sources: savings, Social Security, or a company pension plan. The unfortunate fact is that Americans save very little money nowadays, and for anyone under forty, Social Security is a very hollow promise. For most, private pensions are the key to a comfortable retirement. When it comes to private pensions, however, most companies and employees themselves don’t contribute enough money, meaning that future retirees will have to work longer if they want to maintain their pre-retirement standard of liv¬ing into retirement.
Various researches can determine possible reasons as to why consumers have quite a lot of trouble making financial decisions that can be the most beneficial later in life. In the context of savings for retirement, conclusions from a test reveal that self-regulatory state, possible future orientation and more and better financial knowledge can and most likely will influence a consumers intentions for retirement investments, for example, setting up a 401K in the USA. Other studies suggest consumers who show higher amounts of future orientation are usually more likely to start up a retirement plan. Studies also show that financial knowledge and financial orientation toward ones future can help to influence the chances of one participating in a 401K plan.
Figuring out where you will be financially years from now is hard to imagine. There are always what you plan, and then there’s things that just happen that you would usually rather not have of. You can always make goals and things and hope that things go alright and end up close to what you expected.
The success of any project or goal requires good planning. The objectives that we set are for the short and/or the long term. In my case, I have short and long-term financial goals. All my short-term goals are already in the starting point, which means I already plan or started implemented the different steps to reach the final point or the expected outcome. On the other hand, for my long-term financial goals, I taught about them but I haven’t decided yet how I will process. Ever since I got here in the United States in 2009, I have been thinking about getting insurance coverage. For many reasons I have never had a chance to start a plan or initiate any type of work towards that goal.
When it comes to financial planning, economics plays a major factor in people’s personal finances in many ways, it is an essential part of the world we live in today. When you buy gas, or shop for groceries, plan a vacation, economics is at the core of those choices. So why does economics play such a vital role, what is the driving force behind this? In its simplest form, it’s based on choice. We will look at a few factors that impacts financial planning and the economy, including the use of credit, and how the government affects the economy.
When it comes to your financial life cycle, retirement is one of the most important and strenuous areas to plan for. Because of the reduction in income during retirement, a person is exposed to longevity risk (risk of outliving your money) and the risk of not being able to maintain your current or wanted lifestyle. Our Red River Wealth Management team has analyzed your financial information and goals to create the retirement recommendations listed below.
I have never met anyone who said I don’t want to have more money, or I don't need any money for my future. Every person has a desire to be financially successful. Any financial advisor will always emphasize the importance of saving money. Any person that has been financially successful without being a celebrity is mainly due to saving money. When saving money the person should let their money work for them. Most people do that by putting their money in a savings account that draws interest while it's in the account. When a person is trying to start an account they should consider a couple of things. First they need to know if there are any monthly fees and minimum deposits. If they're trying to build their money, there isn't a reason why the
Retirement is one of the most important crossroads we face in life. It involves a fundamental change in lifestyle, one that calls for a totally new outlook on how we approach each day. All our lives we have been conditioned to think in terms of saving for our retirement years. Society has created this mystique about this time in our lives when we magically transform into different people with different lives when really we are the same people with different day to day lives. According to Medina, (2012) planning for retirement isn’t a "walk in the park" because for many people, debts are high while income is low.
Managing personal finances is an important skill to acquire. However, no where in school is this subject taught. As a result of a lack of preparation, our society is subject to a high percentage of people who lack financial success. Those who are successful at managing their personal finances will find that they are successful in many other areas as well. To learn how to manage personal finances there are books and web sites that provide a step by step guide to successfully managing personal finances. Those who lack financial success often possess many of the same traits.
The future is always uncertain. However, having a financial plan for the future can save a person a lot of grief. More importantly, it can help tremendously for that young adult who is fresh out of college, and at the beginning stages of life; for the young adult who is preparing to attain his or her Doctorate, and will be living, most likely, completely on his or her own.
Retirement planning is a way to insure that you will have enough income to live comfortably when you retire. Most people will be retired 25 years or more, and careful planning is the key to successful retirement. Why would you want to have bill pressures and mortgages when all you really want to do is relax, or follow that dream of traveling the country in an RV?
Over the past centuries individuals have become increasingly in-charge of their financial well-being after retirement. In the financial sectors where it has become more difficult, individual are faced with an increase of new investments products, many of which are new and often fairly complex. Investment opportunities have extended beyond national boarders, allowing individuals to spend in a wide range of assets and currencies. However, it is very hard to steer this new financial structure and the penalties of the mistakes made can be devastating as the financial crisis had made it very clear (Lusardi, 2008). This essay will focus on the importance of Financial Literacy on savings; does it (financial literacy) improve savings? And is there
Personal financial planning is important because it helps you prepare financially for the future. My first short-term financial goal is to have an 8-month emergency savings account. This class helped me understand the important steps needed to achieve my financial goals. “Successful financial planning requires specific goals combined with spending, saving, investing, and borrowing strategies based on your personal situation and various social and economic factors, especially inflation and interest rates” (Kapoor, Dlabay & Hughes, 2012). First I evaluated my spending habits. This allowed me to see where I was
In my conclusion, it is very important to save for the beneficiary of the upcoming future. Simply setting aside a percentage of the income received each paycheck will be the backbone to an unexpected situation. Emergency reasons, retirement, and luxury spending can all be obtained if one is mindful of their spending. Money is the biggest cause of stress in America today and mindful everyday spending can lead one to experience real financial freedom. The earlier an individual begins to save in life, the more financially stable they will be in their