Welcome to professrsavings.com, we teach finance basics.
Today we will teach you how to build the basic retirement plan in about two minutes.
Ah.. the good old retirement plan. Relaxing on the beach sipping on a pina colada with a pink umbrella.
Let’s jump right to it.
A retirement plan or strategy is making a list of of expenses and sources of income after you retire.
Expense maybe college loans and income maybe the 401 (k) plan you invested in.
Professor Savings would like to build a retirement plan to live comfortable with his own home and dog.
Professor Savings works for Cash Flow University and decide to invest 11% to his 401 (k).
Professor Savings needs to calculate how much he needs to pay his bills such as mortgage and car insurance
Pretty simple. So if he retires from teaching at sixty five, he needs to plan for let’s say an additional thirty five years assuming he lives to the beautiful one hundred age.
After adding all his retirement expenses, he will know how much he needs to save.
He can next look at different investment that will provide him with that passive income whether this it be in stocks or a rental property as an example.
As a general note, the older you get the less risk in certain securities you should take.
Time is our greatest asset so at an older age it is harder to recover a large amount of stock loss. Just something to consider.