Every person, however workaholic he or she is, must have at least once experienced that inner urge to kiss goodbye to his/her job. The frequency of this feeling increases if the job happens to be an underpaid and overstressed one.
The wonderful inventions of mankind such as electricity and telephone have kept many a job intact. The next month’s electricity and telephone bills are probably the first road blocks in the way of quitting a job. But it’s all true that one cannot work on and on. Ideally, one must plan for retirement and figure out a time frame for quitting his/her job gracefully. In many countries, the retirement age is 55 years. Although there have been calls for increasing the retirement age, a majority of jobs at lower hierarchy still have retirement age fixed at 55. So let us look at how you can build a self-sufficient pension fund – dollar by dollar.
How To Achieve Financial High-fives At 55
The first thing you would need to do is to calculate how many years are left for you to reach that magic age of 55. The greater the number of years, the more options you have for planning. If you have, say, more than 25 years left (or in a simpler equation, if you are under 30), you can allocate a small portion of your salary or any other type of income to the pension fund. This money will be deposited in a number of financial instruments such as government bonds and securities, mutual funds, and the share market.
If you have a good understanding of these investment options, you can specify the kind of schemes in which your money should be deposited. Or you can even specify the proportion of your money that should be invested in a particular scheme.
The next thing that you should do is to log on to the internet (no need if you are already there, of course) and search for retirement calculator tools or inflation calculator tools. Among the zillion entries in the search results, select the one that looks good to you. Find the rate of inflation and cost of living of the year when you would turn 55 with the help of these software tools. But always remember that these software applications would arrive at the results by analyzing the past trends, and do not have any in-built astrological software engine!
Good common sense guides you during these calculations. There are always some kinds of activities and expenses that will appear as unnecessary for a retired person. You can eliminate all work-related expenses safely. Monthly cell phone charge is another easy target for cost cutting. So, you can think of several practical aspects that can be avoided without any compromises on the so-called quality of life and arrive at the cost of living when you would reach 55.
Once you get an idea of the living expenses at your retirement age, you can reverse calculate the figure that you need to invest now. For a start, you can do a research on the various retirement benefit schemes available to you. Depending on your age and the likely amount that you need as monthly pension, you can start contributing a certain amount towards your retirement plan.