BUILD YOUR NESTS EARLY

Joha Rahman

http://retirerich-joha.info/2010/09/build-your-nest-egg-early/

Prepare for your retirement early

THE SECRET TO RETIRING RICH IS TO START

EARLY

Get your retirement plan and start saving early.

Delay and procrastination will cost thousand of dollars in opportunity. It will make the different between comfortable retirement and struggling old age.

Many young persons age 20-40 say they cannot effort it. But savings do not have to be big. A saving equivalent to a cup of coffee daily for 30 years will be a big amount.

THIS IS HOW TO START TO BUILD UP THE

WEALTH

Goal setting

Set The Budget

Discuss it with your Family

Start Implementing

Review and Adjust.

GOAL SETTING

When you are convinced that you need a retirement plan, the next step is to come up with the goals. The goals have to consider your aspiration of you retirements life and connected to your career plan.

For example, you may want to make social contribution after your retirement or you may like to get involved in religious activities. Whatever your goals, you will need cash to support it. As the life expectancy is getting longer, do adjust accordingly.

SET THE BUDGET – HOW MUCH IS THE

RETIREMENT FUND.

Estimate the monthly amount needed for your

retirement.

Your can extrapolate the present requirement

and adjust it with annual inflation.

Add the additional cost of medical insurance.

The amount is an estimation and readjusted

annually.

ESTIMATION THE REQUIREMENTS FOR YOUR

RETIREMENT.

For example if you work out that your retirement is $2000 per months, then working out the amount of saving required considering 4% interest.

Without consuming the principal, and living on interest alone you will require:

Amount = $2000×12/ 6x 100

= 400,000

So the the start of the retirement you should have $400,000

(ii) With $400 000 as the target value to be achieved, then the saving plan can be formulated.

Using the annuity calculation from http://www.1728.com/annuity.htm

The annual saving is $4773.17

You may not be able to fork out $400 per month when you start working, you can always start it small and increase the amount as your salary increase.

GET THE INPUTS FROM YOUR FAMILY

Discuss the plan with your spouse. If your spouse

is working, the chance is you are going to retire

about the same time. I am suggesting that you

have two retirement plan, this is cleaner as you do

not know what the future is going to be.

If one of you past away, at least the others saving

is still freely available. In the event of the

unexpected, such as separation, it will make it

cleaner.

GET STARTED

The important point is to get started.

Do not bog down with details and trying to get a

perfect plan.

The amount saving can be adjusted depending

on your requirementd.

THE RESOURCE

Blog site:

http://retirerich-joha.info/

The author had retired form 35 years career in an airline and

now focused on blogging.

eMail : mktg@joharahman.com