Retirement planning

Retirement planning involves determining retirement income goals and what's needed to achieve those goals. Retirement planning includes identifying income sources, sizing up expenses, implementing a savings program, and managing assets and risk. Future cash flows are estimated to gauge whether the retirement income goal is possible.

You can start at any time, but it works best if you factor it into your financial planning as early as possible. That’s the best way to ensure a safe, secure—and fun—retirement. The fun part is why it makes sense to pay attention to the serious and perhaps boring part: planning how you’ll get there.

- It is never too early or too late to start retirement planning.

- Retirement planning refers to financial strategies of saving, investing, and ultimately distributing money meant to sustain oneself during retirement.

- Many popular investment vehicles, such as individual retirement accounts and 401(k)s, allow retirement savers to grow their money with certain tax advantages.

- Retirement planning takes into account not only assets and income but also future expenses, liabilities, and life expectancy.

The emphasis that one puts on retirement planning changes at different stages of life. For instance:
- Early in a person’s working life, retirement planning is about setting aside enough money for retirement.

- During the middle of your career, it might also include setting specific income or asset targets and taking steps to achieve them.

- Once you reach retirement age, you go from accumulating assets to what planners call the distribution phase. You’re no longer paying into your retirement accounts. Instead, your decades of savings begin paying you out.