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10 Steps to Creating a Financial Plan for a Secure
Retirement
- Write down each of your goals on a 3x5-inch card.
- Create two stacks--goals you want to accomplish within
the next five years or less and goals that will take longer
than five years (you'll save for these goals differently).
- Sort the cards within each stack in order of priority,
based on how hard you are willing to work or save to reach
each goal. Make retirement a priority.
- Write on each card what you need to do to accomplish
that goal, plus when, what it will cost, and how much you'll
need to save each month to reach your goal.
- Set priorities again, creating a "dream" stack and a
"reality" stack to guide your saving and spending.
- Create a snapshot of your finances by calculating your
net worth--the total value of what you own minus what you
owe. Include items such as personal possessions, vehicles,
home and other real estate, share draft/checking and savings
accounts, insurance policies, stocks, and retirement plans.
On the liabilities side, consider your home mortgage, credit
card debt, student or auto loans, and taxes/capital gains
owed.
- Envision your retirement and the monthly resources
you'll need in retirement, along with when you want to
retire.
- Estimate how large your nest egg will need to be to
"buy" your retirement goal.
- Use a worksheet or software program to help calculate
how much you'll need to save every month and the return on
investment you'll need to reach your goal. Check
www.cuna.org
and click on calculators for help with your retirement
planning.
- Create a spending plan for your monthly income that
starts with your "payment" to your retirement savings plan
designed to build the resources you'll need for the
retirement you desire.
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From "Savings Fitness: A Guide to Your Money and Your
Financial Future," made available to consumers by the U.S.
Department of Labor and the Certified Planner Board of
Standards. |
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