CONTENTS

INTODUCTION

WHAT IS RETIREMENT PLANNING ?

RETIREMENT PLANNING

WHY PLANS FOR RETIREMENT ?

NEED FOR RETIREMENT PLANNING RETIREMENT PLANNING :BE PREPARED

INDIA & RETIREMENT PLANNING

WHAT ARE THE KEYS OF RETIREMENT PLANNING RETIREMENT :HOW MUCH MONEY DO WE NEED ARE YOU PLANNING RETIREMENT ? RETIREMENT PLANNING ADVICE FROM MASLOW

STEPS IN RETIREMENT PLANNING WHAT IS FINANCIAL PLANNING ?

HOW TO PREPARE FOR RETIREMENT WHEN THERES LITTLE TIME LEFT ELEMENTS OF RETIREMENT PLANNING

ANNUITY

SOCIAL STRUCTURE PENTION PLANS

PRESENT SENARIO OF RETIREMENT PLANNING RETIREMENT EARLY :HOW LONG SHOULD YOU WAIT? RETIRE IN STYLE

RETIREMENT PLANNING: WHERE WILL MY MONEY COME FROM? RETIREMENT PLANNING:BUILDING A NEST EGG

RETIREMENT PLANNING:ASSET ALLOCATION AND DIVERSIFICATION CONCLUSION

BSLI PLAN FOR RETIREMENT LIC PLAN FOR RETIREMENT RESEARCH METHODOLAGY ANALYSIS & INTERPRETATION FINDINGS

SUGGESTIONS

BIBLIOGRAPHY CASE STUDY

OBJECTIVES OF THE STUDIES

State the importance of retirement planning

Outline various financial factors that affect sensible retirement planning

Discuss a few calculations for the retirement corpus needed

Discuss the elements of the retirement planning.

Review key features and benefits of BSLI Freedom 58

Retirement Planning:

Introduction

Retirement is one of the most important life events many of us will ever experience. From both a personal and financial perspective, realizing a comfortable retirement is an incredibly extensive process that takes sensible planning and years of persistence. Even once it is reached, managing your retirement is an ongoing responsibility that carries well into one's golden years.

While all of us would like to retire comfortably, the complexity and time required in building a successful retirement plan can make the whole process seem nothing short of daunting. However, it can often be done with fewer headaches (and financial pain) than you might think - all it takes is a little homework, an attainable savings and investment plan, and a long-term commitment. In this tutorial, we'll break down the process needed to plan, implement, execute and ultimately enjoy a comfortable retirement.

What is retirement?

Retirement is the point where a person is not in any kind of employment /business/occupation. This usually happens upon reaching a determined age, when physical conditions do not allow the person to work any more. Retirement could also be due to personal choice-either due to adequate pension or personal savings or due to a regular unearned income like interest, rents etc. The retirement age varies from country to country but it is generally between 55 and 70. Certain jobs, which are of dangerous nature or of fatiguing nature, may have an earlier retirement age.

Retirement Planning:

Why Plan For Retirement?

Before we begin discussing how to plan a successful retirement, we need to understand why we need to take our retirement into our own hands in the first place. This may seem like a trivial question, but you might be surprised to learn that the key components of retirement planning run contrary to popular belief about the best way to save for the future. Further, proper implementation of those key components is essential in guaranteeing a financially secure retirement. This involves looking at each possible source of retirement income.

Need For Retirement Planning

Increasing Life Span

Low Returns In Conventional Modes Of Savings.

Unintended Contingencies.

Increasing Medical Cost.

Diminishing Trend Of Joint Family System

Inflationary Trends

Absence Of Social Security Benefits By The State

Pursuing Hobbies

Falling Interest Rates

MANAGING POST-RETIREMENT RISKS: A GUIDE TO RETIREMENT PLANNING

We live in an era marked by periods of economic uncertainty and volatility. At the same time increased responsibility has shifted to individuals for securing their financial well being in retirement. And with this added responsibility, retirees may be exposed to a variety of risks that can affect them both as individuals and members of society. Recognizing this growing trend towards individual responsibility and the risks that may be encountered, the Society of Actuaries (SOA) launched a broad research and information effort in the late 1990s to raise awareness of post-retirement challenges and seek ways to address them. As part of this ongoing effort, the SOA published an informational chart in 2003 that explained the risks of retirement and served as an educational tool to help individuals prepare for them. In everyday language, the chart provided a comprehensive summary of the risks and complemented other retirement planning material. With the passage of time, the creators of the original chart recognized there would be value to updating it with insights into recently introduced products, legislative changes and new issues confronting retirees. As a result, the SOA is pleased to make available this new version. In the following pages youll find discussions of key financial risks that individuals may face in their retirement years and strategies for managing them. The risks described include issues related to longevity, investments, health, loss of loved ones and more. We encourage you to familiarize yourself with the chart, jot down notes as you read through it, and use it in combination with other planning material. It is our hope that this information will not only lead to better-informed decision making, but help individuals plan and enjoy a more rewarding retirement.

Managing ones own retirement funds over a lifetime has many pitfalls, even with expert help. Nobody knows how long the money must last. Life expectancy at retirement is an average, with about half of retirees living longer and a few living past 100. Planning to live to a certain age is risky, and planning to live to the life expectancy for someone their age will be inadequate for about half of retirees. In theory, retirees want to make sure their money will last a lifetime without cutting back unnecessarily on their lifestyle. In practice, unexpected events may make this very difficult. A licensed insurer is the only entity outside the government that can contractually guarantee to pay lifetime income. Financial products from other firms could run out of money to pay income to a long-lived individual. Besides longevity, the other risks listed below can cause a retiree to run out of money. Someone who lives many years has greater exposure to these other risks. Long lifetimes are difficult to predict for individuals. Its easier to predict the percentage of a population with a long life than to predict this for an individual. Wives outlive husbands in most cases. Social Security, traditional pensions and payout annuities all promise to pay an individual a specified amount of income for life. They may also pay income after death to the spouse or other named survivor. Some newer products can help protect retirees against outliving their assets:

A reverse mortgage converts home equity into lifetime income, although administrative charges can be high.

Longevity insurance is an annuity that does not start paying benefits until an advanced age such as 85.

This niche product may fit into a carefully designed financial plan.

Managed payout plans, offered in several forms by financial services firms, draw down ones assets gradually.

Income from such plans either is not guaranteed or is guaranteed at a lower level than would be available from a payout annuity that has the same cost.Payout annuities, also called immediate or income annuities, can be useful for retirees to purchase because they maximize the amount of guaranteed lifetime income available from a sum of money.

Deferred annuities and variable annuities, normally purchased before retirement, are not discussed here. Experts disagree about when annuitization is a good strategy. Disadvantages include losing control of assets, costs, and inability to leave money to ones heirs. Annuities without inflation protection are only partial protection against living too long.An annuity that seems unattractive to buy at retirement age may make sense later. Multiple annuity purchases can be made over time to average interest rates inherent in their purchase prices. People generally should not annuitize all their assets, but they may want to consider annuities in their overall retirement plan. Financial projections can be very useful in retirement planning, but actual experience will differ. All retirees should review their expected income needs and sources at least every few years and adjust spending if necessary.

LONGEVITY RISK: OUTLIVING YOUR RETIREMENT RESOURCES

Inflation should be an ongoing concern for anyone living on a fixed income. In the recent era of relatively low inflation, workers may not remember the double-digit inflation rates of 1947,1974 or 1979-81. Even low rates of inflation can seriously erode the financial well-being of retirees who live many years. Social Security and other government retirement programs pay benefits that increase with inflation, but many private pension plans do not. Average past inflation can be calculated from historical data, though actual experience over a typical period of retirement may vary widely. Past inflation data can provide some help in estimating retirement needs, but there is no guarantee that future inflation will not be greater. Many investors try to own some assets whose value may grow in times of inflation. However, this sometimes will trade inflation risk for investment risk.

Common stocks have outperformed inflation in the long run, but are poor short-term hedges. The historically higher returns from stocks are not guaranteed and may vary greatly during retirement years.

Inflation-indexed Treasury bonds grow in value and provide more income as the

Consumer Price Index goes up. Many experts say that retirees investments should include some of these securities.

Inflation-indexed annuities, not widely used in the United States, adjust payments for inflation up to a specified annual limit. Annuities with a predefined annual increase also are available. These kinds of annuities cost more than fixed payment annuities with the same initial level of income.

Commodities and natural resources often rise in value during long-term inflation, but may fluctuate widely in the short run. Inflation can be a major issue, especially as retirement periods lengthen, and it is not highly predictable.

Retirees can set aside extra assets to permit a gradual increase in income payments. Providing for expected inflation one way or another, though costly, is needed in any realistic plan for managing resources in retirement. Delaying receipt of Social Security will build up valuable inflation-indexed benefits for retirees and spouses. When housing values were increasing, homeowners seemed to have a hedge against inflation. Current and future retirees who expected to use their home equity as a source of retirement income may be highly disappointed, especially if housing values continue to decline.

INFLATION RISK

Lower interest rates tend to reduce retirement income in several ways:

Workers must save more to accumulate an adequate retirement fund.

Retirees earn less spendable income on investments such as CDs and bonds; any income reinvested earns lower rates.

Payout annuities yield less income when long-term interest rates are low at the time of purchase.

Long-term and short-term interest rates can vary within a wide range. Underlying forces that drive interest rates include expected inflation, government actions and business conditions. Immediate annuities that provide fixed income are a way for retirees to ensure stable income despite changes in interest rates, although inflation will still be a problem. Investing in long-term bonds, mortgages or dividend-paying stocks also offers protection against lower interest rates, although the value of these investments will fluctuate. The risk is that rising interest rates will reduce the value of such assets available to meet unexpected needs. Long-term interest rates often move up or down at about the same rate as inflation. Higher real interest returns, above rates of inflation, usually make retirement more affordable. This occurs when retirees assets include sizeable amounts of interest-paying bonds, CDs, etc. However, some retirees have adjustable-rate mortgages or substantial consumer debt, so that higher interest rates are an added burden. For these retirees, the higher interest rates that accompany increased inflation may reduce their spendable income at a time when its most needed.

INTEREST RATE RISK

Stock market losses can seriously reduce ones retirement savings. But common stocks have substantially Out performed other investments over time, and thus are often recommended for retirees long-term investments as part of a balanced investment allocation strategy. Individual stocks rise and fall based on the outlook for the stock market and the specific company. Individual stocks are more volatile than a diversified portfolio. Stock index funds are diversified, and usually achieve slightly above-average investment returns, but they still are exposed to the ups and downs of the stock market. Stock market investors should diversify widely among investment classes and individual securities, and be prepared to absorb possible losses. Because such losses may take many years to recover, older employees and retirees should be especially careful to limit their stock market exposure. Hedge funds may offer some protection, but they can be complex and have high expense charges. Some financial products let an individual invest in stocks and guarantee against loss of principal. However, risk charges and other expenses may be high and the financial firm may limit losses by shifting most funds to bonds. Younger workers can afford to take more risks because they have time to make up short-term losses and can postpone retirement. Older individuals should allocate a smaller proportion of assets to the stock market. Life-cycle or target funds gradually shift some of their assets out of stocks as the individual gets older. When significant personal assets are in company stock, the risk of losing ones job is compounded by possible loss of savings if the company does poorly or goes out of business. Even if the company appears strong, its safer to diversify those assets among other investments.

STOCK MARKET RISK

Loss of retirement funds can occur if:

An employer pension plan sponsor goes out of business.

An insurer that is providing annuities becomes insolvent.

Assets held in a participants defined contribution plan account lose value.

Risk of such loss depends on the individuals investment allocation, and includes possible failure of the employers business if much of the account is invested in employer stock. The risk of insolvency for an employer or insurer is closely related to its credit rating in the bond market and, in the case of an insurance company, its claim paying ability rating. Those with top ratings are safest, but ratings sometimes fall rapidly when business conditions or information changes. Benefits in most defined-benefit private pension plans are insured by the federal Pension Benefit Guaranty Corporation up to certain limits. Annuitants are covered by state insurance company guaranty funds up to specified limits in the event of insurer insolvency. Defined contribution plan participants need to diversify investments. Where the plan automatically includes heavy concentration in employer stock, participants should look to other assets for diversification. If a defined benefit plan is also provided, this automatically gives some diversification. A pension plan can be terminated even if the employer remains in business. Under defined benefit plans that are not covered by PBGC insurance (e.g., state and local government employee plans, church plans), benefits can be lost on termination.

BUSINESS RISKS

Many retirees plan to supplement their income by working at a bridge job part-time or full-time. Todays jobs often make few physical demands, and may even be done at home. Some organizations prefer to hire older workers because of their stability and life experience. But success in the job market may also call for technical skills that retirees cannot easily gain or maintain. Employment prospects among retirees vary greatly because of demands for different skills, and can change with health, family or economic conditions. About half of all retirees retire earlier than planned, often because of job loss or poor health. Retirement plans rarely allow for phased retirement, so a bridge job usually means working for a new employer. Re hiring of retirees also is growing more common. These kinds of jobs often have lower pay or benefits, and are more subject to layoffs. Postponing retirement may be the most powerful way for workers to improve their retirement security. This allows their retirement savings to keep growing while the workers accumulate more benefits from Social Security and retirement programs. Retirement planning should not rely heavily on income from a bridge job. Many retirees welcome the chance to change careers and move into an area with less pay but more job satisfaction, or with fewer demands on their time and energy. Terminating employment before age 65 may make it difficult to find a source of affordable health insurance before

Medicare is available. Note that COBRA coverage usually ends after 18 months (36 months if disabled).

EMPLOYMENT RISK

Policy risks include these possible changes:

Increase in taxes (income, property, sales, etc.).

New kinds of taxes such as a consumption tax or value-added tax.

Reduction in entitlement benefits from Social Security, Medicare and Medicaid.

Increase in retiree contributions for Medicare Higher payments by high-income retirees are already scheduled.

Tighter income standards for Medicaid and other means-tested programs.

Changes that may include benefit cuts or higher taxes will be needed to pay benefits to aged baby boomers. Such benefits include Social Security, Medicare and veterans benefits. Municipal bonds, Roth IRAs and Roth 401(k)s have a tax-free status that offers protection against higher income tax rates. Converting a traditional IRA to a Roth IRA will lock in current income tax rates. But new kinds of taxes could reduce the purchasing power of such tax-free income. Historically, Congress has been very reluctant to reduce benefits promised to current retirees. Older workers also may escape benefit reductions, but young workers future government benefits are less safe from reduction. Under current law, more and more retirees will pay income tax on their Social Security benefits because the dollar exclusion from taxation does not rise with inflation.

PUBLIC POLICY RISKS

Unexpected health care costs are a major concern. Employers continue to cut back on post-retirement health care benefits. Low-income retirees may spend a large percentage of their resources on health care. Medical technology improvements that extend life may increase health care costs. Health care costs are:

Relatively easy to predict for a large group over a limited time.

Hard to predict for individuals.

Very hard to predict far into the future.

Medicare is the primary source of coverage for post-65 retirees. Supplemental coverage is available from employer plans and individual Medical gap policies or HMOs. Other federal or state-local programs may assist low-income retirees. Instead of retiring from a job with health benefits, employees may choose to keep working, at least

part-time, in a job that will allow them to remain covered Future resources are hard to predict because a high level of uncertainty exists about the future design of Medicare. In a typical group, a small percentage of individuals usually account for a large percentage of the groups overall health care costs. Its not too late for retirees to reduce their risk of major health problems by lifestyle changes involving diet, exercise, smoking, etc.

UNEXPECTED HEALTH CARE NEEDS & COSTS

Facilities or caregivers sometimes are not available for acute or long-term care, even for private paying individuals. Couples may be unable to live together when one of them needs a higher level of care, thereby increasing cost and emotional stress. Individuals may want to review private and public support programs available where they intend to live. In some cases, individuals may be able to choose a general area of residence to improve access to care. Lack of appropriate facilities or caregivers may force people into a higher level of care, or cause them to be without needed care. The current shortage of health-care workers may become worse.

LACK OF AVAILABLE FACILITIES OR CAREGIVERS

Changes can be sudden, tied to an illness or accident, or gradual, perhaps linked to a chronic disease. Multiple problems are common when physical or mental capabilities decline. The percentage needing help rises substantially with age, but changes in individual cases often are hard to predict. Insurance for long-term care covers disabilities so severe that assistance is needed with daily activities such as bathing, dressing and eating. Some policies require a nursing home stay; others do not. The cost of long-term care insurance is much less if purchased at younger ages, well before anticipated need. Functional status may be hard to measure, and different insurance products may use different definitions of limitations. Its better to look for less-severe definitions when purchasing insurance. Medicaid covers a large share of total nursing home costs and may cover assisted living, with benefits available only to people with very low or no assets. Defining functional status can be a problem. For example, difficulty in using telephone might mean:

Cant use phone at all.

Can answer a call but not place one.

Cant look up number to call but can use speed dial.

Can use phone on limited basis but not use answering machine.

None of the limitations on using the phone would trigger benefit eligibility under long-term care insurance, but they may trigger the need for help. Spousal protection rules (which vary by state) need to be considered when deciding whether Medicaid would help. Care options are linked to housing choices and these are

evolving.

LOSS OF ABILITY TO LIVE INDEPENDENTLY

Special housing for the elderly provides a range of services including help with activities of daily living and sometimes with ongoing health care too. Housing that includes care can be quite costly. Some housing focuses on care for specific diseases or conditions. The most appropriate form of housing for an individual in a given situation may not be available in the chosen geographic area, or may have a long wait for entrance. Needs at time of retirement are predictable unless the individual is disabled. Future needs are hard to predict because they vary with the ability to function; for example, stairs may become a barrier. Snow removal and yard care can also become problems, but can be contracted out. Special housing is financed mainly from personal assets and current income. Retirement income planning may allow for increases tied to inflation plus significant increases later to cover different types of housing. Medicaid and/or long-term care insurance may cover part of housing costs if merged with care. Choices depend on personal preference and functional status plus financial and family resources. Housing can be a major asset in retirement. A home can be converted to cash by selling it or using a reverse annuity mortgage. Continuing care retirement communities include elements of advance funding of costs for long-term care and medical care.

CHANGE IN HOUSING NEEDS

The death of a spouse is a major change in family situation that is often accompanied by a decline in economic status:

Some income may stop at the death of a spouse or former spouse.

The death of a disabled persons caregiver spouse may bring financial problems at a very difficult time.

The surviving spouse may not be able or willing to manage the familys finances.

Inability to cope with a spouses death or terminal illness contributes to high rates of depression and suicide among the elderly. It can be difficult to predict which spouse will live longer in individual cases. Women are widowed more often than men.

Many financial vehicles are available and can be used in combination:

Life insurance

Survivor income in Social Security, pension plans and annuities

Long-term care insurance

Savings

Wills and estate planning are important tools to provide for a surviving spouse. Some experts say that a surviving spouse needs about 75 percent of the couples income to maintain living standards. Widows financial resources are very low in many cases.

Poverty rates for elderly widows are about 15 percent compared to 4 percent for married couples. Social Security provides continued benefits to survivors based on their personal work and family status. Note that a single-earner family survivor generally gets two-thirds of the combined family benefit that was payable while both were alive, whereas in a dual-earner family with equal earnings, the survivor gets only about half of the combined benefit. In this case and many others, the reduction in Social Security benefits after death of the first spouse is much greater for a two-earner couple than for a single-earner couple. Married couples may want to choose their Social Security retirement dates carefully to increase potential surviving spouse benefits. This may mean that the lower earner applies for benefits at age 62 and the higher earner waits until age 70.

DEATH OF A SPOUSE

Marriage and divorce can affect benefit entitlement under public and private plans. Some of these effects may not be well understood. For example, a woman sometimes can maximize her Social Security benefits by first applying as a widow or divorced spouse, later applying at age 70 for benefits credited on her own record as a worker. Divorce can create major financial problems for either party. A substantial percentage of marriages end in divorce. Many women are alone in retirement. Divorce or marriage after retirement age is not uncommon and should be recognized as a possibility. This is a personal issue. There are no formal programs. In divorce proceedings, the law allows for division of private pension plan benefits covered by ERISA. For this purpose, divorcing spouses need a properly drafted qualified domestic relations order (QDRO). Older couples who marry, especially those with children, may want a pre-nuptial agreement that defines each partys rights to distribute or dispose of property as they wish, not as a court would decree. In divorce proceedings, retirement benefits may get transferred from one spouse to the other, depending on decisions of the parties and the divorce court. Couples considering whether or not to marry need better information about how their decision affects benefits from Social Security, Medicaid and retirement or survivor programs.

At marriage, an individual may gain rights to survivors benefits under Social Security and retirement programs.

Marriage or remarriage may result in the loss of some benefits.

OTHER CHANGE IN MARITAL STATUS

Retirees and surviving spouses may lack financial skills and judgment, especially at advanced ages if mental capabilities decline. They often are preyed upon because of their substantial assets and fading cognitive skills. Friends and relatives may be unqualified to advise them about some issues or even have bad motives. Salespeople and brokers may promote products or investments that are unsuitable. Societal changes are resulting in greater use of paid caregivers instead of family members. Caregivers,

financial advisors, or scammers may have access to retiree assets, personal belongings, ID data and passwords. Exposure may increase as retirees directly control more assets, financial products become more complex, more retirees use computers, and scammers become more adept. However, good advice and good products are increasingly available to people who seek them out. Here are some precautions retirees can take:

Learn the ABCs of investing and handling money.

Get advice from qualified and trustworthy sources including U.S. Department of Labor and employer-sponsored programs.

Keep decision-making simple; make sure all options are understood.

Get several opinions on important issues.

Be very cautious in giving control of assets to any professional or in dealing with strangers personally or online.

In later years, expect to rely more on trusted family members or professionals; investigate and choose such people long before a need for their help suddenly arises.

Use paid caregivers who are bonded.

Even a well-educated person with a financially secure retirement may be exposed to substantial loss from these sources. Few people have the wide range of expertise needed to give good advice in every situation, so its important to have access to different sources of advice. Using traditional pensions or payout annuities reduces some of the risks noted here.

BAD ADVICE, FRAUD OR THEFT

Many retirees find themselves helping other family members including parents, children and grandchildren. Retirement planning should recognize any obligation to assist such family members. A change in health, employment or marital status may upset such plans and call for greater personal or financial support from the retiree. Generally, family members are known at time of retirement, but new grandchildren may come after retirement. Sometimes people remarry after retirement. Older children or grandchildren often need money for higher education, and a few need special help to deal with physical or mental handicaps. Their parents can usually foresee such cases by the time they retire and try to plan accordingly. Adult children may look for help in case of unemployment or financial setback. Social Security and other government programs may pay benefits to family members other than the workers spouse. An increasing number of grandparents are the primary caregivers for their grandchildren today.

Uncertainty of Social Security and Pension Benefits

First off, we need to be up front about the prospects of government-sponsored retirement - they're not very good. As we all know, the developed world's populations are continuing to age, with fewer and fewer working-age people remaining to contribute to social security systems. greater and greater burdens are being placed on the system, as more and more people retire and, due to advances in health care, are living longer than ever before. This "double-whammy" effect holds the potential to put significant strains on the system and could leave governments with no other viable option but to reduce social security benefits or suspend them altogether for all but the poorest of the poor. Private pension plans aren't immune to short comings either. Corporate collapses, such as the high-profile bankruptcy of Enron at the turn of the century, can result in your employer-sponsored stock holdings being wiped out in the blink of an eye. Defined-benefit pension plans, which are supposed to guarantee participants a specified monthly pension for the duration of their retirement years, actually do fail every now and again, sometimes requiring increased contributions from plan sponsors, benefit reductions, or both, in order to keep operating. In addition, many employers who used to offer defined-benefit plans are now shifting to defined-contribution plans because of the increased liability and expenses that are associated with defined-benefit plans, thus increasing the uncertainty of a financially secure retirement for many. These uncertainties have transferred the financing of retirement from employers and the government to individuals, leaving them with no choice but to take their retirement planning into their own hands.

Unforeseen Medical Expenses

While the failure of a social security system may not occur, planning your retirement on funds you don't control is certainly not the best option. Even with that risk aside, it's important to realize that social security benefits will never provide you with a financially adequate retirement. By definition, social security programs are intended to provide a basic safety net - a bare minimum standard of living for your old age. Without your own savings to add to the mix, you'll find it difficult, if not impossible, to enjoy much beyond the minimum standard of living social security provides. This situation can quickly become alarming if your health takes a turn for the worse.

Old age typically brings medical problems and increased healthcare expenses. Without your own nest egg, living out your golden years in comfort while also covering your medical expenses may turn out to be a burden too large to bear - especially if your health (or that of your loved ones) starts to deteriorate. As such, to prevent any unforeseen illness from wiping out your retirement savings, you may want to consider obtaining insurance, such as medical and long-term care insurance (LTC), to finance any health care needs that may arise.

Estate Planning

Switching to a more positive angle, let's consider your family and loved ones for a moment. Part of your retirement savings may help contribute to your children or grandchildren's lives, be it through financing their education, passing on a portion of your nest egg or simply keeping sentimental assets, such as land or real estate, within the family.

Without a well-planned retirement nest egg, you may be forced to liquidate your assets in order to cover your expenses during your retirement years. This could prevent you from leaving a financial legacy for your loved ones, or worse, cause you to become a financial burden on your family in your old age.

The Flexibility to Deal With Changes

As we know, life tends to throw us a curve ball every now and then. Unforeseen illnesses, the financial needs of your dependents and the uncertainty of social security and pension systems are but a few of the factors at play.

Regardless of the challenges faced throughout your life, a secure nest egg will do wonders for helping you cope. Financial hiccups can be smoothed out over the long term, provided that they don't derail your financial plan in the short term, and there is much to be said for the peace of mind that a sizable nest egg can provide.

INDIA & RETIREMENT PLANNING

90% per cent of Indias total working population is not covered for postretirement life.

The main objective of retirement planning is to create a well funded and safe future for the client.

Financial needs of the client needs to be clubbed between his/her current income

and post retirement expenditure.

To maintain up current life style one has to plan to save almost 65 to 85% of current income.

Life Cycle

Every phase of life cycle has a different level of income, expenditure and saving.

The first phase of life cycle is the childhoodwhere an individual has no earnings but certain amount of money is spent on him/her (school fees, clothing, food etc).

Second stage comes where the individual may or may not start his real earnings or a stable career.

In the third stage an individual enters a stable career and has good amount of earnings to save and start planning for his/her retirementFourth & fifth stage is time period to save maximum and allocate maximum funds for the retirement planning. In the sixth stage comes the old age. At this stage the savings tend to reduce because of medical expenses, new expenses related to old age etc. The last two stages of the life cycle is the retirement period where the saving are utilized to cover the real retirement years or retirement costs.

Career Stability

Career stability is one of the most important factor which clearly needs to be evaluated to develop a retirement plan. Fund allocation for retirement is done with the help of surplus earnings of an individual during his/her pre-retirement period. Stable career and in return stable earnings provides a scope for having well planned and organized retirement plan Employers also have a important role in retirement planning as they contribute in pension plans other contribution plans etc. Career stability helps to draw clear anticipation of future earnings can be which helps in retirement planning

Major Factors Affecting Career Stability

Job Satisfaction: Job satisfaction covers the factors like the level of pay and benefits, the perceived fairness of the promotion system within a company, the quality of the working conditions, leadership and social relationships, and the job itself. Alternative opportunities: If the market is opening up for new jobs and careers and individual can provide his works onto those opportunities the career stability can embark for changes. Employer-Employee Relationship: This issue covers the factors like loyalty of an individual towards the employer, future protection provided by the employer, motive Changing economic conditions: The economic conditions of a country like recession cycles, developing sectors, problems related to any particular sector private and public ownership etc also affects the career stability.

There are also various policies and economic strategies of government related to employment & foreign investments etc which have a direct affect on employment scenario. Introduction It is an interactive part of retirement planning.

In pre-retirement counseling all the basics of the retirement plan are drafted as per the needs and expectations of the client and as per the clients present and anticipated financial conditions.

Financial planner has to clearly evaluate the needs, attitude & lifestyle of the client to have a strong and trustworthy relationship with the clientation, leadership, timely appraisals.

Steps For Retirement Plan

Inauguration Of Retirement Plan: Inauguration of retirement plan would depend on life expectancy. If the client starts accumulating funds for his/her retirement early, with small savings & less burden he will be able to achieve the goal.

Desired Retirement Status: This would involve budgeting, income sources and proper asset management etc. Estimated expenditure and sources of income during the retirement years to the client have to be evaluated properly.

Retirement Expenses & Sources Of Income: Clear identification of all the costs & incomes has to be made. Provisions for allocating 65 to 70% of current income for the retirement period should be drawn.

Insurance With Retirement Planning

Insurance plans with a cash back or whole life insurance are suitable because they provide insurance as long as the premiums are paid and also accumulates savings, thus it has a cash value.

It also helps to pay off uncovered medical costs, funeral expenses & also acts as an income replacement for survivors. With increasing life expectancy, and other challenges a life insurance can provide a life-long, worry-free retirement and insurance protection.

Major expenses of the retirement years are the health care costs, health insurance can act as a helping hand in that case to meet up these costs. With increasing life expectancy, and other challenges a life insurance can provide a life-long, worry-free retirement and insurance protection.

Major expenses of the retirement years are the health care costs, health insurance can act as a helping hand in that case to meet up these costs. Estate planning should maintain out the costs of the property and should develop an estate plan to give proper and safe income generation.

Estate plan will cover all the legal formalities and all the documentation regarding future transactions.

Tax Planning With Retirement Planning

Savings and investments are interconnected.

Proper management of savings and investment results to tax benefits and these become very important at the time of retirement.

Retirement planner must clearly evaluate the aspects of its liquidity, security, and the most important one the return and tax income over such investments. Proper tax planning can itself prove out to be a saving tool because with effective tax planning is basic foundation for effective retirement planning.

Retirement Planning - Be Prepared

When most people consider retirement planning, they think only of financial issues -- making sure they have enough money and resources to meet their needs. Often the emotional, physical, and spiritual aspects of life are ignored. Consider the following tips.

Retirement Planning - Be Prepared Emotionally

Emotional preparation is essential for good retirement planning. You need a purpose, a reason to retire. My husband and I love to travel, so we visited Maine, Nova Scotia,

Niagara Falls, and Hershey, PA during our first year of retirement. We also make it a priority to visit our children several times each year. We love being with our grandsons especially during the holidays. I always take plenty of my books to give to those who may need a word of encouragement.

Another aspect of preparing emotionally for retirement is humor. Laugh at yourself! Medical science now acknowledges that the best resistance against disease is laughter.

The Bible says, A cheerful heart is good medicine, but a crushed spirit dries up the bones

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Retirement Planning - Be Prepared Physically

Preparing physically is important to retirement planning. Eating nutritional foods and exercising is essential.

Drink at least 6 glasses of water each day. Ive noticed that my body has a softer and more radiant look when I drink more water. My face takes on a glow when I drink six to eight glasses of water each day. We need this refreshing drink to keep our body active and healthy.

Make a habit of keeping plenty of fresh, ripe fruits and vegetables around the house for handy consumption. Raw foods digest quickly and have plenty of nutrients. When in a hurry, grab a piece of fruit or vegetable such as carrots, celery, or some nuts and be on your way. Eating the right foods bring great rewards such as feeling better about yourself.

Become active and stay on the move. Consider water aerobics or walking while carrying weights. This helps strengthen arms and legs. Find what you enjoy doing and do it! Your doctor can help you pick the right exercise for you. Being active improves your mood, helping you to feel more in control. It also builds self esteem, which increases motivation. Having a set time each week to exercise helps control your blood pressure, your risk of developing heart disease, and lowers the risk of cancer and diabetes.

Retirement Planning - Be Prepared Spiritually

Preparing spiritually for retirement is the key to living the abundant life Jesus talked .

Jesus spoke the following words: The thief comes only to steal and kill and destroy; I have come that they may have life, and have it to the full.

A retired woman wrote, My husband and I both retired from our careers in 2004. We are enjoying our retirement to the fullest because we had a plan. Earthly life is a time of preparation not only for retirement but for eternity. We both love to sit by a warm fire and read and study Gods Word every morning. We also are active in church singing in the choir and my husband is an usher. We enjoy fellowship with others. God sent His only beloved son to live and die so we may be the head and not the tail, the lender and not the borrower. Its up to us and our relationship with Jesus Christ that determines how we live.

Taking care of ourselves spiritually, emotionally, and physically is the key to enjoying our golden years. To accomplish the purpose for which God created us, we should keep our eyes on becoming the person God wants us to be spiritually, emotionally, and physically. Are you Gods child? Are you sure that you will go to heaven when you die? If not, keep reading!

What should I consider before early retirement?

When considering early retirement, it is important that you prepare financially and in other areas too. Only 27 percent of workers and 50 percent of retirees feel very confident they will have enough money to live comfortably throughout their retirement years. Money management is the key when considering ones options for early retirement.

The ideal time to start planning and saving for early retirement is when people start working, which is usually in their teen years. But we all know that most young people are not thinking that far ahead. Those of us finding ourselves at least a decade or more away from retiring can consider the following and do further research on these topics.

We can identify our needs, interests, and concerns of midlife and aging.

We can think about issues that affect the aging like: Social Security, Medicare, and prescription drugs.

We can stay informed about emerging social trends that affect aging like: increasing midlife divorce rates, evolving social attitudes, boomers civic involvement, and studying the impact that these changes make on our lives.

Once we have accepted the fact that our lives have reached the pinnacle of retirement, we can better prepare ourselves and our environment for such an event. The United States Department of Labor has published The Top Ten Ways to Prepare for Retirement. For those of you who live outside of the United States, research whether your country provides a similar list.

Know your retirement needs if you decide to maintain the same standard of living. It will take 70 to 90 percent of your pre retirement income.

Find out about your Social Security benefits by calling the Social Security Administration or visiting their website.

Learn about your employers pension or profit sharing plan, if they have one.

Contribute to a tax-sheltered savings plan, such as a 401 (K).

Ask your employer to start a plan. Simple plans can be set up by certain employers. You can order IRS Publication 590 by calling the IRS or visiting the IRS website. You can also request Choosing a Retirement Plan for Your Small Business.

Put your money into an Individual Retirement account (IRA).

Dont touch your savings if at all possible.

Start now, set goals and stick to them. Create a tight monthly budget and following it closely.

Consider simple investment principles. Knowledge of your financial security and how your pension or savings is invested is important. Be sure to investigate the companies involved with your investments and stay atop of any fraudulent practices. You can always check with the Better Business Bureau or your states Attorney General Office.

Always ask questions of your banker, employer, your union, or financial advisor if you need more information.

Other things to consider for early retirement are plentiful. To make your money last through your retirement, it will take some thought, research, and planning. Health is an unpredictable factor in our lives and the lives of our spouses. We can consider getting long-term care insurance.

Lifestyle choices of how and where you live will impact your retirement financial security. Could you be happy living elsewhere, or would you rather stay in your present home? Is it time for a smaller house? You may get a tax break if you sell your home.

When opting to sell and move elsewhere, consider these options:

Cost of living in the area you wish to move.

The amount of taxes in the state and city that you consider.

Does the climate of the area suit you?

Will you still have support of family and friends?

Are opportunities for work available and close by?

People must consider cutting their spending. Budget in the items you must have, and keep those separate from the things you would like to own. Avoid using credit cards, especially if you have a tendency for impulsive buying. Avoid using ATM withdrawals to save on extra fees charged by banks and other financial institutions. Shop around for the things you want, and you will get the items for a more reasonable price. Work with your spouse to keep your spending within your budget and stick to it. Expect the unexpected, and leave room in your budget for emergency repairs of the furnace, car, house repairs, and major appliances.

Here is how one woman and her husband prepared for early retirement. During the last few years prior to retiring, we started paying off all of our debt. Our home and new automobile were paid in full. We both retired on the same day at 61 years of age. We have enjoyed each day, doing what we both love: church work, writing, reading, family, and traveling.

What are keys to a happy retirement?

There are three rules for a happy retirement.

Create a steady income by investing a portion of a 401(K) or savings in an income annuity, which pays you a guaranteed income as long as you live. This plan of annuities and having a monthly check for life helps you to have the cash for unexpected expenses. Further research is needed before obtaining annuities to make sure they are from a reputable financial company.

Stay hours a year was enough to satisfy the retirees feeling of usefulness. But this positive effect disappeared at 500 hours of volunteer service. So dont overdo on the volunteering. If it becomes a chore, you're doing too much.

If at all possible, try to control your timing for retirement. We cant control being forced into retirement by ill health, disability, or company downsizing. This accounts for 75 percent of involuntary retirements. It pays for us to plan for such an occurrence. We can pay for health insurance coverage while we are in a healthier condition, because ing active increases your ability to enjoy retirement. Volunteering up to 200 many companies will not Sharing what God has blessed us with is a key to a happy retirement. The blessings of God are a gift to share with othersfor we are blessed to be a blessing. When we give to others our basket of life seems to overflow with the goodness of God.

Recently, I donated several copies of a book I have written to an organization that helps women coming out of prison. The head of this organization said she would be teaching this as a Bible study. She could not thank me enough for these books. Yet, I was the one most blessed in giving to those who have such a need. God loves a cheerful giver. When we give out of love there is joy expressed in our giving. People will see and know there is something special in your gift. Your basket and your kneading trough will be blessed. You will be blessed when you come in and blessed when you go out cover preexisting conditions as we get older.

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Retirement: How Much Money Do We Need?

One concern many people have prior to retiring is whether they will have enough income and assets to get them through. This is even more the case when we plan to retire early or there are existing expenses.

Common Considerations

Stages

There are typically several stages in retirement, each with different spending patterns. Retirees usually spend more when they first retire. This generally lessens over time, because activity levels moderate. However, sometimes this is not the case, such as with unexpected medical bills.

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Are You Planning For Retirement?

There's more to planning for retirement than just the money aspect. Preparing for the best time of life is an exciting and fulfilling process. Today, your retirement could very well be a full one-third of your life - 30+ years. Retirement is the time of life where you choose to do what you like to do best. So, planning for this important time is essential. Baby boomers have a unique opportunity. As always, we have reinvented each stage of life compared to previous generations. We want to do it our way. Are you approaching your retirement years? Are you being forced into retirement because of downsizing? Or are you early in your career and want to really plan ahead? You've come to the right place. I'm a baby boomer that found myself being forced to retire due to downsizing. So I had to do some quick retirement planning.

Differences

Each of us is unique and our retirements are spent in different ways. Because of this, there is no way of knowing for sure how much money will be enough at retirement.

Types of Expenses

If you retire with existing expenses, you need to include these in your budget. You also need to factor in if you are retiring early, if you pay rent, and whether you will be able to work, if need be.

Ideal Portfolio

In retirement, the ultimate portfolio would provide cash for emergencies, a steady flow of income that increases faster than inflation, and defense against market slumps.

The short answer is that different people need different amounts of money when they retire, and there are too many variables to say how much is really enough. Your estate planning attorney should coordinate closely with your financial advisors to ensure that

your retirement and your estate plan continue to meet your needs.

Why retirement plans?

Our pension plans are designed to ensure that your retirement years truly become your golden years. They will provide you the financial security to pursue your unfulfilled dreams.

What is retirement insurance?

Retirement insurance ensures that you or your family members receive a regular pension amount post a retirement date. You have the flexibility to choose the retirement date and the manner in which you receive the pension.

Why do I need retirement insurance?

Longer retirement years : Average life spans are increasing in India and hence, the retirement years are likely to be longer. With the rise in inflation you will need more money to live in comfort.

Financial independence post retirement : Earlier, people could depend on their children to take care of them post retirement. However, as a modern individual, would you not like to maintain your financial independence post retirement also?

Inflation : Inflation is an important factor. Post retirement, you need a regular income to ensure that your expenses can be met.

How much retirement plan do I need?

Post retirement, you would like to maintain your life style and also need to take care of increased medical expenses also. You can arrive at the exact Human life Value HLV by using the Retirement Calculator.

Why should I start planning for my retirement now?

The earlier you start planning for retirement, the larger will be the corpus for you at the time of your retirement. Neglecting your retirement needs can prove to be costly later in your life. With age, your expense will tend to increase and therefore retirement planning becomes more difficult.

Apart from the benefit of a comfortable retirement, also enjoy tax benefits as per prevailing tax laws.

Retirement Planning Program - planning is more important than the plan

A retirement planning program comes in a number of guises. It may be one of the many, and some very comprehensive, computer programs that will take your assumptions and with perfection calculate the results. It may be one of the many structured training programs being offered by various institutions for people nearing retirement. Finally it may be a personally crafted program which integrates all the tools and advice along the way to get your customized retirement plan. The computer retirement planning program is a useful tool in your overall retirement planner but, even the more intricate Monte Carlversions, have a number of limitations;

Their apparent precision and accuracy is misleading. They are easy to believe them because they calculate results so quickly and efficiently. The conclusions are neatly presented

They are only as good as the human assumptions. Truthfully no one really knows what is going to happen tomorrow let alone next year or in 5 or 10 years time.

Unfortunately the future is not a neat projection of the past.

The course run as a retirement planning program also has limited benefits as it is usually conducted too late. It is no use finding out a year or two before you plan to retire that your finances don't quite meet your expectations. These courses are useful only in that in doing something is better than doing nothing!

These courses should be run for young people so that they start thinking about retirement while they can do something about managing it. Changing it's course The best retirement planning program would include both these other versions as tools in the overall plan. Recently I have been asking friends two questions;

Are you concerned about retiring?

Do you have a retirement plan?

Sadly most people I speak to answer yes about being concerned and no about having a plan. Although some do add that they have a financial plan. One which turns out to be a glossy folder with some questionable projections put together by a financial adviser ... not really much use without the complete retirement plan. My next question regarding their non-existent retirement plan is, "why not?". The answers are the usual reasons, or excuses, one hears about planning in general:

Why plan if you don't know what's going to happen in the future?

I don't know how long I'm going to live

I'm bombarded by so many confusing messages and just don't know what the economic future will bring?

I'm sure everything will be okay?

I've never thought about it!

I suppose that many of these reasons are true but unfortunately without any plan for retiring you'll be totally unprepared to manage the very challenges and unexpected events that will occur in your life.

Your retirement planning program

You should start from the time you start working. The earlier you start, the better chance you have for success. To have adequate resources to meet your goals and objectives.

So firstly you must define what you want in your retirement. Individuals have vastly different views on the ideal retirement and these require vastly different amounts of funds to support.

What does retirement mean to me?

Why do I want to I retire?

Where would I like to live?

What is my planned retirement lifestyle?

What would I like to do?

Do I have any concerns about my health in retirement?

How long do we think we'll live?

Depending on the answers to these questions you can then start putting together a financial plan.

Will we have enough money?

How much have we got?

How much do we need to save?

What specialist information or support do we need?

Do we need to supplement our income?

What contingencies do we want to make?

To get a final plan you may have to repeat this retirement planning program cycle a number of times and will probably require the input from a financial planner to ensure all the technical and legal issues are understood. This would be the completion of round one. To be repeated every year changed as circumstances change. Practice makes perfect. Each time you repeat the process you will understand it better. Never get too complacent as you never know what tomorrow will bring. Regularly reviewing your comprehensive retirement planning program will ensure that you've done everything possible to make your retirement successful - providing the resources to meet your expectations.

Retirement Planning Advice from Maslow: How Much Do We Really Need?

What do we really want our retirement years to be like, and how much will that cost us? How much retirement income do we really need? We can get insights into these questions from famed humanist psychologist Abraham Maslow, who created a framework of human needs now popularly known as Maslows hierarchy of needs.

Maslow contended that most of us have a fundamental set of physiological and safety that take first priority. Once we satisfy these basic needs, we can then devote time and attention to additional needs involving love and belonging, such as friendship, family, and sexual intimacy.

We then have the potential to satisfy a higher level of needs that Maslow labeledesteem, involving confidence, achievement, and respect. Maslow called the last, highest level of needs self-actualization, and these include morality, creativity, problem-solving, and acceptance.

According to Maslows theory, its difficult to pay much attention to your higher-order needs when your lower-order needs are threatened. And that can happen pretty easily in our retirement years if we dont have sufficient retirement income or retirement savings to satisfy our basic needs for shelter, food, health and so on. Given this scenario, how can we apply these insights to planning for our retirement years? I have two suggestions:

Spend the least amount of money necessary to do a good job of satisfying your lower-order needs, which usually include housing, transportation, food, and medical care. Heres where some careful judgment is needed, as its possible to spend much more on housing, transportation, and food than what we really need to be satisfied.

According to Maslow, life gets really good when were satisfying the top three level of needs: love and belonging, esteem and self-actualization. Take a long, hard look at just what it will take you to satisfy those needs. More specifically, ask yourself how much money you think it will cost. Its quite possible that it wont take as much as you think. Its also possible you can work and earn wages doing something that satisfies one of these higher order needs now thats really win-win!

Advertising can be very persuasive, telling us we can buy our way to happiness and fulfillment. Ads may try to convince you that a bigger house, a flat-screen TV, or the latest car will help you achieve life satisfaction. But those items arent in Maslows upper levels of needs, which is a fancier way of saying that money cant buy you happiness. So just tune out the ads and pay attention to your own needs.

Since boomers will need to make every dollar count in their retirement years, youll want to think about how to most efficiently secure the lower priority of needs. Then you can focus on whats really important, which for most people comes down to relationships with family and friends, taking care of your health, and doing what truly gives you meaning and purpose in life needs regarding food, shelter, sleep, property, and resources necessary for living

Steps in Retirement Planning

Decision retirement about the retirement age option. Setting of financial goals Saving of relevant amounts w.r.t. goals Investing in appropriate modes Calculation of net worth Regular monitoring of financial plan and incorporate the necessary amendments in the plan.

Factors Affecting Retirement Planning

Life style Personal values Nature of income- salaried, business or professional; stable job/non-stable job; private job/government job Number of years left for taking retirement Inflation rate Present net worth of a person Risk appetite of a person Services of a certified financial planner Conviction in the retirement planning effort Seriousness & perseverance for retirement planning Life expectancy is the major ruler of retirement planning. As per the Indian context, still the importance of retirement planning is not clearly identified. With the increasing life expectancy, high standards of living and high expectations for the upcoming future, pressure is building up for fund allocation, to meet up the needs of retirement. Long Key factors to be evaluated while making out a retirement plan are present life style, income and capacity to save, family circumstances, level of inflation prevailing in the economy & the standard one would like to maintain at the time of post retirementLongevity of life expectancy has to be kept in mind while making out a retirement plan.

Key factors to be evaluated while making out a retirement plan are present life style, income and capacity to save, family circumstances, level of inflation prevailing in the economy & the standard one would like to maintain at the time of post retirement

What is Financial Planning?

Financial Planning is a critical use in ensuring your Long-Term Financial Security in all possible ways, Indeed its a roadmap to achieve Financial Freedom in different stages of your life like

Buying a Home/ Car/ Other Goals like planning a Vacation Abroad

Emergency Money Planning

Childs Education / Higher Education Planning

Childs Marriage Planning

Retirement Planning

Passing the Created Wealth to the next Generation.

There are some basic questions to answer for doing financial planning:

Where you stand today? What is your current financial situation?

Where do you want to get to? What is your vision of your future financial situation?

Will you be able to get there? How do you plan to achieve your vision?

For a financial plan, you need to analyze your financial needs & goals here as mentioned above. One should measure in terms of money that what resources one need to meet this stages of different goals and also the time period to achieve these goals. Finally, one has to write an action plan so that to fulfill the Plan what products are useful to buy and savings to be done or increase/decrease in future too.

Financial planning yourself?

Of course everyone canbut just like you wont cure your own disease on your own, you need to come to an expert for financial planning. Otherwise, without the right financial skills and tools for financial planning, your finances can end up as a disaster.

Your Life - Your Goals

What financial goals should you be thinking about?

Anything you want to do in your life can usually be quantified in terms of the money that you will need to spend on the goal you wish to fulfill. All goals have a financial value attached to them. For instance, if you want to buy a Car, you can easily calculate whether it will cost you Rs. 4 lacs or Rs. 12 lacs. Some of the Financial Goals can be classified as :-

Retirement Planning

Education for children

Childrens Marriage

Emergency Fund Planning

Buying a house or a car of your own etc.

Depending on person to person we all have priorities that which goal is having highest importance and for that what to start saving to meet those entire goal on time. Financial conditions should be built on solid foundations. Once the basic needs are met one can start thinking about the goals for their changing lifestyle, this goals can be different from one to another as different people have different needs according to their lifestyle for them and their family so that its extremely personal.

Examples of this goals can be :

Buying an LCD television

Big Vacation Abroad

Creating your own Gym

Your Financial Plan & You

Need to have tons of money ?

Financial Planning is the greatest thing that not many people think about even if it provides a high security of future & also it makes your life simpler. We already knows that we cant predict the future but its better if we plan it today. All of us have something to plan it, not necessarily one have to be rich to plan it. Financial Planning is a peace of mind Someone has rightly said:- If you have dreams, you need a financial plan! It depends on how much effort you willing to put in for your financial plan, like in terms of Expenses, Income & Asset, Liabilities too.

But surely it requires lots more than the above which are,

The time you have to achieve the goal

Risk taking capacity of individual

Need of emergency money

Increasing inflation

Need of regular income

Is this time is right for a financial planning? Still many years remaining in my retirement planning, why to plan so early? The best time to make your financial plan is TODAY, as Financial Planning is a continuous process, as it remains in contact till the each goal is executed in proper way, Life has many uncertainties, if you start early you will have moretime left to make your money grow more, as we grow older our expense will rise and we may regret that time has passed.

Why should you do Financial Planning regularly?

Times are never constant, it changes so as our needs as we and our families grow old, the change in life style or may be change in inflation happens, some of the things are not in our hand such as inflation & purchasing power. So the old investment we have done will not make sense sometime in future as the inflation rises.

Some examples of this :-

Change in lifestyle

Change in family culture / addition of a family member

How to Prepare For Retirement When There's Little Time Left

What if retirement is just around the corner and you haven't saved enough? Here are some tips. Some are painful, but they'll help you toward your goal.

It's never too late to start. It's only too late if you don't start at all.

Sock it away. Pump everything you can into your tax-sheltered retirement plans and personal savings. Try to put away at least 20 percent of your income.

Reduce expenses. Funnel the savings into your nest egg.

Take a second job or work extra hours.

Aim for higher returns. Don't invest in anything you are uncomfortable with, but see if you can't squeeze out better returns.

Retire later. You may not need to work full time beyond your planned retirement age.

Part time may be enough.

Refine your goal. You may have to live a less expensive lifestyle in retirement.

Delay taking Social Security. Benefits will be higher when you start taking them.

Make use of your home. Rent out a room or move to a less expensive home and save the profits.

Annuity (finance theory)

The term annuity is used in finance theory to refer to any terminating stream of fixed payments over a specified period of time. This usage is most commonly seen indiscussions of finance, usually in connection with the valuation of the stream of payments, taking into account time value of money concepts such as interest rate and future value.

Examples of annuities are regular deposits to a savings account, monthly home mortgage payments and monthly insurance payments. Annuities are classified by payment dates. The payments (deposits) may be made weekly, monthly, quarterly, yearly, or at any other interval of time.

Ordinary annuity

An ordinary annuity (also referred as annuity-immediate) is an annuity whose payments are made at the end of each period (e.g. a month, a year). The values of an ordinary annuity can be calculated through the following: [3]

Let:

r = the yearly nominal interest rate.

t = the number of years.

m = the number of periods per year.

i = the interest rate per period.

n = the number of periods.

Note:

Also let:

P = the principal (or present value).

S = the future value of an annuity.

R = the periodic payment in an annuity (the amortized payment).

( annuity notation)

Also:

Clearly, in the limit as n, increases

Other types:

Fixed annuities These are annuities with fixed payments. They are primarily used for low risk investments like government securities or corporate bonds. Fixed annuities offer a fixed rate but are not regulated by the Securities and Exchange Commission.

Variable annuities Unlike fixed annuities, these are regulated by the SEC. They allow you to invest in portions of money markets.

Equity-indexed annuities Lump sum payments are made to an insurance company.

What is annuity? How it is calculated?

The term annuity is used in finance theory to refer to any terminating stream of fixed payments over a specified period of time. This usage is most commonly seen in discussions of finance, usually in connection with the valuation of the stream of payments, taking into account time value of money concepts such as interest rate and future value.

Examples of annuities are regular deposits to a savings account, monthly home mortgage payments and monthly insurance payments. Annuities are classified by payment dates. The payments (deposits) may be made weekly, monthly, quarterly, yearly, or at any other interval of time.

An ordinary annuity (also referred as annuity-immediate) is an annuity whose payments are made at the end of each period (e.g. a month, a year). The values of an ordinary annuity can be calculated through the following:[2] An annuity calculator can help you figure out the fixed payments you'll receive over time. The calculator uses the initial principal balance, the interest rate received, and the length of the payment schedule period to calculate annuity payments .

The term annuity is used in finance theory to refer to any terminating stream of fixed payments over a specified period of time. This usage is most commonly seen in discussions of finance, usually in connection with the valuation of the stream of payments, taking into account time val future value.

Formula to Calulate the Payment Amount of an Ordinary Annuity

PMT = FV(OA) / [((1 + i)n - 1) / i ] where:

FV(OA), or Future Value of Ordinary Annuity: the value of the annuity at time t=0

PMT: Payment amount (value) of the individual payments in each period

i: periodic interest rate that gets compounded for each period of time (periodic rate may be determined by dividing an annual rate by the number of periods in a year)

* n: number of periods (same as the number of payments)

In finance theory, an annuity is an asset typically funded "up-front" with a lump sum that is managed to produce an income stream (often by underwriting insurance policies)...

In practice, it is usually almost a scam, since annuities pay the vendor who sells them a huge commission (which is the reason they push them) and pay out at a far lower rate than the vending agency can earn by simply investing in common stocks (and pocketing the difference between what they earn and what they pay the annuity-holder)...

If you are 89-years-old, MAYBE they make sense...

ue of money concepts such as interest rate and future value.

What Does Annuity Mean?

A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years.

Investopedia explains Annuity

Annuities can be structured according to a wide array of details and factors, such as the duration of time that payments from the annuity can be guaranteed to continue. Annuities can be created so that, upon annuitization, payments will continue so long as either the annuitant or their spouse is alive. Alternatively, annuities can be structured to pay out funds for a fixed amount of time, such as 20 years, regardless of how long the annuitant lives.

Annuities can be structured to provide fixed periodic payments to the annuitant orvariable payments. The intent of variable annuities is to allow the annuitant to receive greater payments if investments of the annuity fund do well and smaller payments if its investments do poorly. This provides for a less stable cash flow than a fixed annuity, but allows the annuitant to reap the benefits of strong returns from their fund's investments.

The different ways in which annuities can be structured provide individuals seeking annuities the flexibility to construct an annuity contract that will best meet their needs.

Investing Outside of Superannuation

Depending on your requirements for income and access to capital, you may choose to invest outside of the superannuation environment. You could choose to purchase investments such as property, managed funds or shares, or you could use your funds to pay off loans or to take a holiday. As part of this strategy, you may also choose to withdraw your funds from superannuation. However, you need to be aware that you may be liable to pay lump sum tax on any amounts you withdraw.

Factors to be aware of:

Generating income from investments held outside the superannuation environment may not be the most tax effective option for you.

If you make a lump sum withdrawal from superannuation to invest into non-superannuation investments, you may lose access to tax-free income/ earnings or the tax offset that is generally associated with income streams that are commenced with superannuation benefits.

If you make a lump sum withdrawal from superannuation to invest into non-superannuation investments, you may lose the opportunity to reinvest your funds into the superannuation environment at a later date.

Investing outside superannuation may impact on any current or future Centre link benefits which you may be eligible for.

Superannuation Taxed and Untaxed Funds

Most superannuation funds are taxed funds, meaning that earnings within the fund are taxed. This includes public offer funds, industry funds and self managed superannuation funds. Some funds however are untaxed and different taxation rules apply for these funds, particularly when taking a benefit as a lump sum or an income stream. Examples of untaxed funds include the Commonwealth superannuation scheme, Super SA, and GESB. Particular advice would need to be sought in relation to funds such as these

Social structure

Social structure is a term used in the social sciences to refer to patterned social arrangements which form the society as a whole, and which determine, to some varying degree, the actions of the individuals socialized into that structure. The meaning of "social structure" differs between various fields of sociology. On the macro scale, it can refer to the system of socioeconomic stratification (e.g., the class structure), social institutions, or, other patterned relations between large social groups. On the meso scale, it can refer to the structure of social network ties between individuals or organizations. On the micro scale, it can refer to the way norms shape the behavior of actors within the social system.

These meanings are not always kept separate. For example, recent scholarship by John Levi Martin has theorized that certain macro-scale structures are the emergent properties of micro-scale cultural institutions (this meaning of "structure" resembles that used by anthropologist Claude Lvi-Strauss). Marxist sociology also has a history of mixing different meanings of social structure, though it has done so by simply treating the cultural aspects of social structure as epiphenomena of its economic ones.

Since the 1930s, the term has been in general use in social science , especially as a variable whose sub-components needed to be distinguished in relationship to other sociological variables.

Overview

The notion of social structure as relationships between different entities or groups or as enduring and relatively stable patterns of relationship emphasises the idea that society is grouped into structurally related groups or sets of roles, with different functions, meanings or purposes. One example of social structure is the idea of "social stratification", which refers to the idea that society is separated into different strata (levels), guided (if only partially) by the underlying structures in the social system. This approach has been important in the academic literature with the rise of various forms of structuralism. It is important in the modern study of organizations, because an organization's structure may determine its flexibility, capacity to change, and many other factors. Therefore, structure is an important issue for management.

Social structure may be seen to influence important social systems including the economic system, legal system, political system, cultural system, and others. Family, religion, law, economy and class are all social structures. The "social system" is the parent system of those

Society: self contained, self sufficient population united by social relationships, bounded from other populations by geographic locations.

stratification: unequal distribution of valued goods or holdings in a population (i.e. class, status, resources, grades, wealth, positional goods, etc.)

Network: pattern of relationships in a population of actors

Social structure variables: pattern of relationships, size of institution, income distribution, and concurrency of social relationships

Definitions and concepts

As noted above, social structure has been identified as

the relationship of definite entities or groups to each other,

enduring patterns of behavior by participants in a social system in relation to each other, and

institutionalized norms or cognitive frameworks that structure the actions of actors in the social system.

Lopez and Scott (2000) distinguish between institutional structure and relational structure, where in the former:

...social structure is seen as comprising those cultural or normative patterns that define the expectations of agents hold about each other's behavior andthat organize their enduring relations with each other. (p. 3)

whereas in the latter:

...social structure is seen as comprising the relationships themselves, understood as patterns of causal interconnection and interdependence among agents and their actions, as well as the positions that they occupy. (p. 3)

Social structure can also be divided into microstructure and macrostructure. Microstructure is the pattern of relations between most basic elements of social life, that cannot be further divided and have no social structure of their own (for example, pattern of relations between individuals in a group composed of individuals - where individuals have no social structure, or a structure of organizations as a pattern of relations between social positions or social roles, where those positions and roles have no structure by themselves). Macrostructure is thus a kind of 'second level' structure, a pattern of relations between objects that have their own structure (for example, a political social structure between political parties, as political parties have their own social structure). Some types of social structures that modern sociologist differentiate are relation structures (in family or larger family-like clan structures), communication structures (how information is passed in organizations) and sociometric structures (structures of sympathy, antipathy and indifference in organizations .

Social rule system theory reduces the structures of (3) to particular rule system arrangements, that is, the types of basic structures of (1 and 2). It shares with role theory, organizational and institutional sociology, and network analysis the concern with structural properties and developments and at the same time provides detailed conceptual tools needed to generate interesting, fruitful propositions and models and analyses.

Sociologists also distinguish between:

normative structure pattern of relations in given structure (organisation) between norms and modes of operations of people of varying social positions

ideal structure pattern of relations between beliefs and views of people of varying social positions

interest structure pattern of relations between goals and desires of people of varying social positions

interaction structure forms of communications of people of varying social positions

Elements of Social Structure

In order to discuss the basic division and types of social structures, the "unit" of social structure should be established first. Murdoch (Goldsmith 1978) has shown that the family is universal among stable societies and thus should be regarded as the "unit" of social structure. Culture, as the product of the interactions in society, both material (between people and physical objects) and non-material (in relation to meanings, beliefs, language, values, ideas, expectations, etc.) is shared, learned, and intergenerational. It also forms the foundation of social structure.

Society is grouped into structures with different functions, meanings, or purposes. In a broader sense is the "social system," which can be viewed as a social structure composed of the economic system, legal system, political system, and cultural system (some sort of shared reality: language, norms, values, etc.). Social structure, however, is much more than that. It also includes education, family, religion, and social services such as health care. Language is the basic channel for communicating information and instruction in a society. There are cultural norms affecting marriage, child bearing, and child rearing. Political systems affect not only the individual political environment but also certain legal systems, regulation of violence (by a police force), property laws, trade rules, health care, and so forth. Societies also generally develop an agreed upon division of labor.

These different elements are interrelated, as can be seen from the following example: economic factors have been responsible for shifts in popular behavior, some of them cutting across class lines. As a result of increasing production, prosperity increased, and the general trend in the standard of living for most groups was upward, allowing ordinary people to improve their diet, housing, and increase leisure time. Workers pressed for a workday of 12 hours, then ten, and, in the early twentieth century, a few groups began to demand an even shorter period. Scattered vacation days were also introduced, and theEnglish weekend, which allowed time off on Saturday afternoons as well as Sundays, spread widely.

Among the several elements of social and cultural structures, two are of great importance:

The first consists of culturally defined goals, purposes, and interests, held out as legitimate objectives for all members of the society. They are simply the things worth striving for. Although some of these cultural goals may be directly related to human biological needs, they are not necessarily determined by them.

The second element of the cultural structure defines, regulates, and controls the acceptable ways of reaching these goals. Every social group invariably matches its cultural objectives with regulations, rooted in the norms and values, regarding allowable procedures for moving toward these objectives.

Generally, no society lacks norms governing conduct. However, societies do differ in the degree to which acceptable behavior, social mores, and institutional controls are effectively integrated with the goals in the hierarchy of cultural values. The social structure remains intact as long as members of the society are able to achieve their goals within the framework of acceptable w