| Retirement planning is not an activity that is | | | | retirement planning. |
| undertaken for its own sake. It is just a means to | | | | 3) Uncertainty |
| an end. It represents a way to accumulate | | | | When you are not working, your savings are |
| enough retirement savings and income to meet | | | | more susceptible to unforeseen, major expenses. |
| retirement needs and mitigate retirement risks. | | | | Retirement planning helps you to anticipate this by |
| While there are several reasons to plan for | | | | helping you to plan or prepare for the vicissitudes |
| retirement, the top five can be singled out as | | | | of life. Although you cannot always financially |
| follows: | | | | prepare for all contingencies, retirement planning |
| 1) Maintain your lifestyle/ standard of living | | | | can help you to anticipate those that may arise |
| 2) Greater longevity | | | | once you retire. |
| 3) Uncertainty | | | | 4) Rising cost of living |
| 4) Rising cost of living/ inflation | | | | Inflation risk is a major retirement risk- especially |
| 5) Rising medical expenses | | | | as most retirement benefits are fixed or do not |
| 1) Maintain your lifestyle | | | | keep up with inflation. The rising cost of living is a |
| Retirement represents a period where you cease | | | | guarantee- something that you can safely |
| to work- at least full-time. When you cease full | | | | anticipate. That places additional pressure on |
| time employment, there is usually a shortfall in | | | | retirement income and retirement savings. |
| income. You need to have replacement income | | | | Combating the erosive effects of inflation is yet |
| and savings to maintain your current lifestyle. One | | | | another good reason to plan for retirement. |
| of the major objectives of retirement planning is | | | | 5) Rising medical expenses |
| maintenance of your desired standard of living | | | | Senior citizens have a higher risk of developing |
| throughout retirement. Without this, your | | | | critical illnesses, particularly in their seventies. This |
| retirement dream would easily become a | | | | is a period when insurers usually cease or reduce |
| nightmare. | | | | medical coverage for senior citizens as well. When |
| 2) Greater longevity | | | | you retire, you must ensure that you have a |
| Senior citizens are living far longer in retirement | | | | buffer that could help you self-insure for medical |
| than before for an amalgam of reasons. Even as | | | | conditions. Even if you have a medical plan, it is |
| far back as 1983, the US Congress recognised | | | | important to have more than enough for anything |
| this trend in making Social Security Amendments. | | | | that is not covered under it. |
| The current life expectancy for males is just | | | | There are several financial and non-financial |
| below 80 while it is just over 80 for females. In | | | | reasons to prepare for retirement, even though |
| addition, the average age of retirement is | | | | financial reasons often take precedence. Planning |
| decreasing, which suggests that retirement | | | | for retirement is not an activity that you should |
| periods are longer. More time spent without | | | | undertake just for its own sake. |
| working full-time precipitates a greater need for | | | | |