Positive Effects Of Good Retirement Planning

By - Eng Khoon
04.11.22 01:06 PM

There are several decisions in life that we have to make that will have a substantial impact in our future. While many people make careful calculated investment decisions regarding their family's needs, they may forget to prioritise their own requirements. That’s where retirement planning comes into play; it is essential to consider the benefits of retirement planning at an early stage of life to secure your future.

We are currently living in a fast paced world where most often we don't stop to pause and review our financial status and do a reality check. This is a barrier which leaves a person not tackling retirement planning in the first place. By the time you want to kick start, you realise it is too late and the lump sum money needed to retire can be a little overwhelming and terrifying !


So, why should you plan for your retirement at an early age? The answer is simple: investing enough for your future is a crucial part of your financial plan when you have a stable incoming cashflow. The retirement planning benefits may not be a primary concern for you as that stage of life seems years away. However, the important thing to note here is that the benefits of retirement planning are more optimum if you start early. 

Today, we’ll be looking at the positive effects and benefits of retirement planning early in life that you must not overlook. This can allow you to spread the savings over a more extended period. That way, you do not get overwhelmed by the financial burden of saving quickly as you near the age of retirement.


1. Financial Backup for Emergencies 

When you are no longer working, the unpredictability of life can be frightening. Preparation for such situations is one of the crucial benefits of retirement planning. By securing your retirement funds, you can ensure that you remain protected during financial emergencies in the future. 


2. Returns on Investment

Investing in a retirement plan instrument can help you save and grow your money over time. Depending on your financial profile, you must decide which investment tool is more suitable for you. The returns from such an investment will be better when you plan them at the right time.


3. Cost Savings

The cost of retirement planning can be reduced in various ways. When you envision the retirement planning benefits for yourself at a younger age, you can begin investing earlier. Any long-term investment plan is more fruitful when you give it the required time.


4. Better Health

Money problems are a major source of stress. As adults, worrying about money has become so frequent in our lives, and that can take a toll on your physical health. Financial stress is linked to physical conditions such as anxiety and depression, robbing you of peace of mind to enjoy your life today. Taking steps today to get your retirement planning on track is an important step in your overall financial wellness.

5. Inflation 

With time, the cost of living and value of money is going to evolve. Inflation will make it more expensive to maintain your lifestyle and fulfil the financial expectations of life in the future when you have retired from your job. This is why you can combat inflation through retirement planning, and make investment decisions in the present to have enough for the future.


Now that you know why retirement planning is important, here are some critical things to remember to get in order to fully enjoy the benefits of retirement planning. 


1. Understand Your Needs

You may believe that expenses after retirement will be less compared to the present. However, you have to maintain realistic expectations so that you can begin investing accordingly and get better benefits of retirement planning. It is in your best interest to map the financial requirements based on the dependents after retirement, lifestyle needs, and personal goals.


2. Determine Time Frame

Your age when you begin retirement planning and the expected age for retirement sets the framework for choosing investment opportunities. It is preferable to have a longer gap between these two stages to withstand higher risks and improve the benefits of retirement planning.


3. Prepare Investment Goals

Once you have established a time frame for your investments, the next step is to determine the objective behind it. Ask yourself whether you require the benefits of retirement planning to be the primary source of income or an extra layer of protection. This will allow you to determine how much money you need post-retirement and use the right investment vehicle for it. 


Achieving your retirement goals takes a proactive approach, and retirement planning is a step ahead. If you are nearing retirement, you will be able to maximise your positive effects of retirement planning and help you make the most of your next 25 years or more.


We hope you enjoyed the article. 


At SK i-Wealth, we offer a full financial service solution for individuals and companies, including retirement planning and wealth planning services. Our firm’s comprehensive wealth platform and experience supports a team of Financial Integrators with the resources they need to deliver integrated financial solutions according to your needs.