With the baby boomers retiring, a lot of them are finding out that what they thought they had in their retirement plans is not what they are going to get. This is one of the reasons why you should be an active participant in your retirement contributions, because you don’t want to make savings for all those years only to end up a pauper and nothing to show for your hard work. One of the ways of keeping track of your retirement, in addition to a financial planner (if you can afford), is using a software that can keep track of your contributions. The following article by Eric Bayne gives the advantages of using a software when it come to retirement planning,
If you are about to retire and have been diligently saving your money, investing in 401Ks, and actively taking control of your retirement funds – you are in the distinct minority. When the time for retirement arrives, well over ninety percent find that they are totally unprepared. And, as a consequence, they spend their retirement years in far different circumstances and environments than they had envisioned. No one is going to take responsibility for your retirement except you. The people that end up satisfied in retirement are the ones that figured that out early on If you don’t plan for it, you could easily find yourself destitute when you reach your sixties.
One method of starting to plan for retirement involves taking advantage of retirement planning software. This kind of software can make planning your retirement a breeze. What criteria should you look for in a retirement planning software tool? First, it should be user-friendly. If it’s difficult to understand and use, it won’t get used. Second, look for evidence that the software is well supported. You don’t want to be in a situation where you’ve spent hours and weeks entering all of your financial data into a program only to find out that the company has gone out of business and no longer supports the software. Sometimes, it’s worth paying a little bit more for a piece of software in return for having the support of a substantial company behind it.
Thirdly, an essential feature in a retirement planning software tool is for it to be able to track stocks, bonds, 401ks, IRAs, and other common financial investment instruments, and including them in the retirement calculations. It should be able to extrapolate how much a regular series of payments over a specified time frame at a specified interest rate will result in at the time that the person retires. And it should be able to work backwards as well. For example, assuming that you are 35 years old. The tool should be able to take your desired income requirements at 65 years, and determine how much you will have to save each year in order to reach that goal.
It’s not mandatory that you actually use software to plan your future. Plenty of people, especially if they have the money, are more than comfortable with leaving their retirement planning services in the hands of a professional. Even in these cases, however, it doesn’t hurt to use retirement planning software to get an idea of the possibilities available to you. You can then take these broad suggestions to your financial planner for implementation of the finer details or simply for a more informed feedback of the desirability of your plans. But also, keep in mind that financial planners aren’t gods. And they are dealing with multiple clients. It’s very possible that your tool may discover something that they missed in putting together you financial portfolio.
For many of the baby boomers beginning to reach retirement age, it’s too late to put a long-term retirement plan in motion. But even they, can make use of software to ensure that the monies they do have last as long as possible. As, for the younger workers, the best time to start thinking about a retirement plan is when you’re young. The younger you start, the less painful are the financial sacrifices that you have to make.