The three essentials to a good retirement plan

Young professionals should begin planning for their retirement as soon as they get a chance. Financial experts all agree that the sooner these plans are made, the easier funding the future will be. A secure retirement plan, however, requires more than just a well-padded investment account. There are three essential components to any good retirement plan. These are listed below: 

Image Source: usnews.com 

Multiple sources of income: This is essential and builds on the school of thought that great retirement plans start from a large nest egg. However, people forget that building nest eggs requires multiple sources of income. Most savings come from an active income, which means that people need to be proactive about their earnings. It is never a good idea to place all eggs in one basket. People should consider looking at other sources of retirement income such as Social Security, pension, real estate income, investment dividends, etc. 

Risk management: Retirement plans are just like any other savings plan, and they are also susceptible to contingencies and other circumstances beyond personal control. To reduce risks, people should ensure that their retirement plans are underwritten by some form of risk management scheme. The most common and recommended option is insurance. Most people have a homeowner’s insurance and health insurance. However, as retirement age approaches, adults should start thinking about their life insurance along with a long-term care insurance. Potential lost income once upon reaching retirement age should be factored in. 

Having a professional advisor: This is not an additional expense, but an added investment to one’s plan. Having a professional advisor can alleviate a lot of headaches. These professionals can assist with other needs such as insurance, investing, health care, and more. 

Remember that planning ahead is the best way to ensure a comfortable retirement.

Image Source: moneysense.ca 

Springer Financial Advisors assists professionals plan ahead and make the best-suited retirement plan for them. Learn more about financial planning when you follow this blog.