Hope To Retire? You Need A Retirement Action Plan

retirement action plan

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Like anything else we do in life, if we have an action plan we are more likely to accomplish our goals. The same is true with planning for retirement. If you have a retirement action plan you are more likely to stay committed to the plan until you achieve your desired results. Action plans hold us accountable to ourselves; they help us refocus when we get off track. A retirement action plan will get you from Point A, today, to Point B, your future retirement.

Your Retirement Action Plan In Play

You have 2 kinds of income available to you; earned income (your paycheck) and portfolio income (your investments).

Your action plan needs to spell out how you plan to use your earned and portfolio income. In other words, how much of your earned income will you contribute to your investments on a monthly basis. Without an action plan to hold you accountable it is very easy to brush off the responsibility of investing, therefore spending all of your paycheck before doing the right thing.

Simplified Example

It is easy to justify buying overpriced café lattes, they taste so good. That yummy taste though will only last about 30 minutes at most. Stick to your retirement action plan and invest all the money you spend on those café lattes day in and day out and you will be financially ahead. By the way, your retirement will last a lot longer than 15 minutes, how about 15 to 20 years.

Emotional Example

Paying for your child’s college education is an emotional decision. You want the best for your child so are willing to do whatever it takes.

Your retirement action plan needs to specify how much you are willing to sabotage your retirement for your child. What does that mean, it sounds cruel. Not really. What is cruel is not understanding the fact that your children can get loans, grants and scholarships to help pay for their educations. You on the other hand cannot get a loan or a grant to fund your retirement. Following your retirement action plan can help you avoid the emotional tugs that will come up on the subject of college funding.

If you want to reach financial freedom one day when you retire, create an action plan to get you there and then stay focused and committed to it.