Understanding Retirement And The Ways To Get There
The dictionary specifies that retirement is the ability to withdraw from a position or occupation or give up active working life. You can achieve retirement when you have sources of income which do not need to be earned by working.
The term retirement and financial independence have often been used interchangeably. Both can be achieved only when you have a significant amount of savings or income from pensions and other investments which can cover your expenditure and give you the freedom not to work for a living.
Some people consider retirement just as moving away from their current profession and beginning to work in a different field. People who have planned early for their retirement define the term as one which will allow them to lead lives without working.
The History Of Retirement
Approximately 100 years ago the concept of retirement did not exist and therefore it can be called a fairly new phenomenon which is making its presence felt because of the increase in life expectancy. The modern-day concept of retirement only began because of a combination of increased lifespans along with the introduction of government-sponsored retirement benefits in 1935 when Social Security was first introduced. Before these programs were introduced people either worked throughout their lives when they were unable to work their families provided them the care they needed.
Is There A Retirement Age?
Within the United States, there is no mandatory retirement age but it is routinely believed that the age of 65 is appropriate for an individual to retire. Social Security defines the full retirement age according to the date of birth of the individual. Therefore, the age cannot be considered at the same for everyone. Retiring from work before the age of 60 is considered as early retirement.
How to Plan For Retirement?
When you consider planning for retirement you must begin to set aside a percentage of your income every year from the time you initiate the plan. If you have made a beginning in your 20s or 30s you must be saving at least 10% of your annual income. If you’re planning has begun at a later age you will need to set aside at least 50% of your annual income. Many people may need to make lifestyle changes in order to have a significant sum of money to afford a comfortable retirement.
People can also look forward to alternatives and consider retiring part-time and look out for jobs which give them enough wages to cover living expenses. Part-time retirement also makes it possible for people to continue investing in their retirement funds to let it grow before they eventually begin using it as an income.
How to Invest For Your Retirement?
You will want to keep a close watch on your retirement investments as you get close to the age of retirement. It is important for you to take the time needed to learn the basics of investing. It gives an understanding of how your retirement investments can provide you the benefits you are looking for along with the kind of income you will be able to generate. You can decide how you want to keep your retirement investments and choose an option which is suitable for your needs.
Decisions You Need to Make When Retiring
You will need to make several decisions which may have a lifelong impact as you near retirement. You need to decide the time of retirement apart from deciding how much you want to spend when you retire. Deciding when you want to begin taking the benefits of Social Security is also something which you must consider. These decisions will have a lasting impact on your life and therefore you are advised to consider carefully before making the decisions.
When you decide to retire from your present job you must understand that the retirement is not something which will provide you benefits unless you begin planning for retirement early in life to make your retirement years happy and fulfilling.
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