Personal Financial Planning for Retirement
. As a result, few set and realise their financial goals, fail to choose the most appropriate financial products, and many fall victims to misleading sales pitch for financial products.
The demographic composition of the UK is changing. Life expectancy has increased with better health care and the retired population is growing relative to the working population. The cost contributing to pension fund will increase accordingly, yet there has been a decline in personal saving for retirement.
A recent research carried out for the Department for Work and Pensions has highlighted the lack of financial planning for retirement. Only 25 per cent of respondents were aware of their correct State Pension age. One third reported that they have given some thought to much money they will need after they retire to lead a comfortable life. It is estimated that seven million people are not saving enough to achieve the pension income are were likely to need or expect in retirement.
The subject of money is difficult to talk about for most people. They find seeing the future a challenge and difficult to talk about. Especially those under 30 are unable to imagine themselves at 70, 80 years of age and beyond. Naturally they lack a clear idea of how they might be living in the future and what they would be doing.
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Pension planning is a response to life events which effect finances, rather
than a priority. Events like buying a house, getting married, having children and taking on responsibilities seem to be the external trigger events for planning pension. Around 60% of people surveyed for the DWP research had some form of retirement provision. These include State Pension, company pension, or a house that can be sold or other savings. Key reasons for the group not having provision were because they had other pressing demands on their income and struggle to cope day-to-day financially. Many such people say that they would rather enjoy life now, believe that retirement is too far away and have not given thought to it.
Are you one of those who stumble through their financial life? Here is how you can change your psychological attitudes to money and financial planning.
Good financial planning requires a strategic long-term plan. The first step is to assess your own particular circumstances, attitudes and timelines and then work out how you can implement your financial plan.
Your personal financial plan should include these elements :
Protecting and growing your income
Providing for family
Health care
Education of dependents
Housing, whether rented or own
Investing in a pension
When and what you can do on Retirement
Saving and investing on monthly basis
Managing your wealth
Passing wealth on
You do not need to be an MBA to understand personal finance. You can read recently published books like to the following to help you understand your attitudes to money, financial jargon, and how to set financial goals in life and make a plan :
Be Your Own Financial Adviser: The Comprehensive Guide to Wealth and Financial Planning (Financial Times Series)
(Jonquil Lowe, Financial Times/ Prentice Hall, 19.99)
Personal Financial Planning Manual 2010-2011 (RSM Bentley Jennison Financial Management, Bloomsbury Professional, 76.00 )
Accessing financial products and services is quite easy in fact consumers are bombarded with commercials, advertisements, direct mail, email and marketing calls to entice you to take out long term loans or payday loans, buy insurance and invest your money. But choosing which products are right for you needs basic knowledge of finance. Financial prudence is important to keep your personal finance healthy and growing. If you caught in a cash crunch, and need an instant loan, remember to take payday loan only from responsible lenders like
No Credit Check Payday UK.
Personal Financial Planning for Retirement
By: Anand
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