The importance of financial planning cannot be understated. Successful careers and prestigious achievements may eventually amount to nothing if efforts are not met with adequate retirement and financial plans.

From bills to debts and everything in between, our income goes into paying off a vast majority of our day-to-day expenses. However, it is important to remember to set aside money not only to sustain yourself but to have the lifestyle that you envision for retirement. After all, your retirement should be spent reaping the rewards of your life’s work and not worrying about money.

To some, that much may seem obvious enough, but less so for many is where to begin.

A Portfolio to call your own

The key component of any good retirement plan is understanding your investment portfolio. They can include a range of assets from cash, stocks, fixed income, or bonds to alternative investments like commodities, real estate. However, the exact composition of the portfolio relies on your individual risk tolerance. For example, lower risk portfolios with a larger composition of fixed income bonds are traditionally considered relatively stable investments. In stark contrast to that, high-risk, high-reward portfolios include equities, which tend to be more volatile and susceptible to market changes.

Curating an investment portfolio that fits your personal risk tolerance is crucial and can be done multiple ways. A more hands-on investors would utilises their own knowledge to create a portfolio specific to their needs. Alternatively, another popular and arguably simpler method is seeking help from a financial adviser representative. Career professionals who are qualified and trained to help create clients create a diversified, and appropriately suited portfolio. Getting the help of a financial adviser is particularly useful if you are unable to commit large amounts of time to managing your own portfolio. An additional, benefit of working with a financial adviser representative is that you may gain access to resources, products and research you may not be able to otherwise.

It is important to remember that while higher returns are always more attractive, more conservative individuals may feel uncomfortable riding out volatile movements in the market. This may create unnecessary stress and duress for the investor.

Passive Lifetime Income

Another important step in creating your retirement plan is setting up passive lifetime income. As the name suggests, passive lifetime income plans are designed to be hands-off way of building your retirement nest egg. A lifetime income plan invests the premium you pay to generate further income, nurturing a fund that can support you for a lifetime. Generally, you will need to pay a fixed annual premium for a given period of time. When the fixed period has elapsed, you will have access to these funds by way of a monthly pay-out. Some plans will allow you to opt to postpone the pay-outs to a later date, therefore enabling you to accumulate more funds for higher returns in the future.

Lifetime income plans are a great way to secure a financially independent retirement although the premiums can be quite expensive. However, these plans can be made more affordable with careful planning. After all, the money you set aside now will be used to support you in the future. Furthermore, some plans allow for greater flexibility regarding the premium you pay. For example, if your financial situation changes and you income increases, you can choose to dedicate a portion of that increased income to your lifetime savings plan. Likewise, if you are facing financial hardship, you may be able to arrange for a lower premium. Consequently, it is important to carefully consider the terms and conditions of each plan to identify the one which will meet your present and future circumstances best.

Curating an investment portfolio that fits your personal risk tolerance is crucial and can be done multiple ways. A more hands-on investors would utilises their own knowledge to create a portfolio specific to their needs. Alternatively, another popular and arguably simpler method is seeking help from a financial adviser representative. Career professionals who are qualified and trained to help create clients create a diversified, and appropriately suited portfolio. Getting the help of a financial adviser is particularly useful if you are unable to commit large amounts of time to managing your own portfolio. An additional, benefit of working with a financial adviser representative is that you may gain access to resources, products and research you may not be able to otherwise.

It is important to remember that while higher returns are always more attractive, more conservative individuals may feel uncomfortable riding out volatile movements in the market. This may create unnecessary stress and duress for the investor.

Conclusion

Benjamin Franklin once said, “if you fail to plan, you plan to fail”. Like many aspects of life, planning is the key to a successful, financially independent future for yourself. The reality of life is that retirement is the destination everybody is heading to. The journey there is where we can exercise control. Take the first steps into designing a journey that suits you today.

TEAM EAGLE

Raymond Wong

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Disclaimer Investments have investment risk. Past performance is not necessarily indicative of the future performance of an investment. Please seek advice from a Financial Adviser Representative before making any investment decisions.