Retirement & Financial Planning Report

The producers of annual reports on the state of retirement readiness have said that a decade of such reports has identified five fundamentals.

“When the world is changing around us and individuals are being asked to take on more personal responsibility for funding their retirement, they need the tools and skills to do so,” said the latest report from the TransAmerica Center for Retirement Studies and the Aegon research firm. It said the fundamentals are:

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• Start saving early and save habitually. “Our research has continually shown that the best route to retirement readiness comes from being a “habitual saver” – defined as being some who always makes sure they are saving for retirement. Although not always easy to achieve, especially against the backdrop of the COVID-19 pandemic and economic uncertainty, individuals can aspire to being habitual savers by prioritizing saving.”

• Have a written retirement strategy. “Taking the time to set out a written plan helps individuals to have more clarity about their priorities, retirement preparations and aspirations. It allows people to see whether they are on track to meet their objectives. People who have a written plan are considered to be “retirement strategists” because they have taken the time to map out their strategy for funding retirement.”

• Have a backup plan. “Sound planning is not just about having a single plan in place. Even the best-laid plans can be derailed when unforeseen events get in the way. The pandemic reveals the dangers of not having a backup place for unforeseen events, whether they be unexpected medical costs, employment setbacks, or sudden loss of income. For this reason, it is important that individuals take the time to consider and form backup plans.”

• Have a healthy lifestyle. “Leading a healthy lifestyle is perhaps the best backup plan especially during a pandemic, and a significant factor in preparing for a comfortable and active retirement. This can also reduce the risk of being forced into retirement due to health issues or having to take time away from the workforce due to periods of ill-health.”

• Embrace lifelong learning. “Being able to act upon the fundamentals of retirement readiness requires equipping people of all ages with new life skills. Building support for lifelong learning involves providing access to vocational skills training and retraining to help workers adapt to a changing labor market and technological developments, allowing them to remain in the workforce as long as possible.”

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