Question

describe in detail various stages in retirement planning like- Insurance Planning, Wealth Creation Goals, Short Term Goals. Long Term Goals, Investment Planning and tax Planning.

Answer 1

Solution. Various stages in retirement planning are enlisted below, namely-

Insurance Planning- An individual while working under an organization or self employed, plans in early stages of his/her life for future to ignore unfavorable situations. This process of retirement planning encircles insurance planning which gives an individual an amount on basis of his/her income to calculate life insurance coverage amount.

Wealth Creation Goals- An individual in his/her early working ages of life, plans and invests in wealth creating ideas by collecting information on accounts that will provide adequate amount to meet his/her future expenses and saving some for leisure in ease.

Short Term Goals- Short term goals are one which are needed to be met in near future by the individual. It is dependent on individual's investment on accounts yielding within 12 months or less and includes not huge amount of money. This can be either to save up for children's higher education or marriage scheme which cuts on retirement amount.

Long Term Goals- This encircles saving money in monthly, quarterly, semi-annually or annually basis to save enough post retirement and includes huge amount of money. It starts with setting a financial goal and monitoring while maximizing savings and minimizing taxes to achieve the same.

Investment Planning- This largely depends on individual's income, lifestyle, number of dependents, and other factors which estimates how much they need to save to for future. Based on such information, an individual prepares for the amount along with interest rate on which it can invest in order to receive desired amount after deducting taxes.

Tax Planning- In case of retirement planning, an individual needs to carefully invest on amount which minimizes taxes and maximizes savings under the time consideration. During early retirement years, taxes boost up so focus is to be made on receiving tax benefits during retirement planning.