¶ … retirement planning. Beginning as early as age, about what are their dreams for retirement? What goals are important for living during the retirement years? The individual should write their retirement plan and have it available to update when needed.
DESIGNING A STRATEGIC RETIREMENT PLAN
People are living longer and having better health than ever before. "We're gained 25 years since 1900. That extra time is added to midlife. We have a second middle age - a period beginning at age 50 to 75" (Kanchier 2002). Often retirement hits before a person is ready? What are the dreams for the future? What is important to one person will be entirely different to another person. That is why determining and designing a strategic retirement plan at an early age is vital to reaching those dreams. The time to do this is "now" and not "later." Begin today.
Introduction/Background: Here Are Some Facts To Consider About the Retirement Game:
By beginning an early retirement plan, a person can create the kind of work and lifestyle you want. You can study, travel, establish a business, restructure or modify a current position, do volunteer work or pursue leisure activities that give you a sense of purpose and feelings of accomplishment, confidence and usefulness" (Kanchier 2002). Most people do not realize there is a second "mid-life" period where they can accomplish dreams during this period of life. There is time to start college or begin a new business. The point is people should begin as early as possible to think about their dreams, whether they accomplish during the second "mid-life" or during their senior years.
Problem Statement:
The problem is that people procrastinate because they lack the knowledge of how to design a retirement plan or feel that they lack the money to put into savings for retirement.
Purpose: The purpose of a retirement plan is to save money in various ways including stocks and bonds for the dreams of retirement. This retirement plan can begin at age twenty or at sixty, but the sooner the plan is written the better chance of having the retirement funds when they are needed.
Literature Review:
Beginning the retirement plan by asking questions:
Begin by asking these questions:
Are there dreams to settle in a specific state or country in retirement? If so, begin to investigate the areas. Perhaps make a few short trips to the area. Begin saving for this with the goal of traveling there when retirement comes.
Are there dreams to open a business? Have a second career? Start taking courses at the local college. Volunteering is a great way to learn about a career field.
Be a person who is willing to dream, to make choices, and be brave.
Perhaps there are dreams to do some of the above, think about these now while there is time to take action to accomplish your dreams:
Women are twice as likely to live in poverty" (Isaacson 2002).
Half of the elderly women living alone have incomes of less than 10,000 per year" (Isaacson 2002).
Only 20% of baby boom women will be financially stable in retirement.
33% of women avoid making investment decisions for fear of making mistakes" (Isaacson 2000).
Good News: Begin the strategic retirement plan now. Do not wait until mid-life or the second mid-life. What is wrong with now? People say that they should save, but they procrastinate until it is too late. "Procrastination is the number one problem" (Isaacson 2002). An early retirement plan should be started in the 20's.
First, Investment Terms
Understanding Investment terms is important before beginning any retirement plan. One site on the web that might be useful is www.african-americaninvestor.com.Here are a few terms and definitions (Rogers 2002):
401 (K): A type of pension plan that allows employees to contribute a portion of their salaries to retirement investments on a tax-deferred basis.
Bear Market: A prolonged period of declining stock prices.
Bull Market: A prolonged period of rising stock prices.
Blue Chip Stock: Stock of large, well-known companies.
CD: Certificate of Deposit: A debt instrument issued by a bank that usually pays interest. The date of the maturity ranges from a few weeks to several years.
DOW: Dow Jones Industrial Average (DJIA) - A popular index to measure and report value changes in representative stock groupings. "The Dow" is a price-weighted average of 30 actively traded blue chip stocks primarily of industrial companies.
Diversification: Spreading risk by putting assets in several categories of investments-stocks, bonds, and money market instruments so that any effects of weakening or failure in one area will not be overly serious to the total investment in the (diverse) portfolio.
Beginning a retirement plan:
At age twenty, do these:
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