The Principles of Retirement Planning/Overview

D e l o i t t e & T o u c h e L L P

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OVERVIEW

Retirement planning is an essential element of any financial plan. Retirement planning is a comprehensive process for determining how much money you will need when you retire. Retirement planning also helps you identify the best ways to save for retirement given your financial situation.

If you are like most people, you probably think retirement planning is only important when you retire. However, proper planning requires a much longer period of time -- from the day you start working until well beyond your actual retirement date. In fact, it's never too early to start planning for your retirement.

Even so, many people put off retirement planning because they're too busy trying to meet their immediate financial needs to think about what will happen in 20 or 30 years. It's easy to understand why meeting your monthly bills seems more important, especially if your retirement is still far off. But here's something to think about: As you move through your life, you will experience many life events that will affect your future financial security -- such as getting married, starting a family, purchasing a home, and sending your children to college. Each of these events will affect your ability to plan for your future financial security. If you develop a flexible long-term plan, you will can overcome these obstacles and ensure financial independence in your retirement years.

The purpose of this publication is to help you understand the importance of retirement planning. It also provides you with a process for planning so you can get started now. The booklet begins with an overview of the financial planning process and then applies this process specifically to retirement. The publication then examines different sources of retirement income are and how these sources can be measured and maximized. You'll also learn how to compute your retirement income shortfall. Finally, the booklet will help you plan for a variety of issues that can affect your retirement at various times during your employment.

This publication is intended to introduce you to the principles of retirement planning and help you develop your own retirement plan. However, this booklet is not intended as a source for specific recommendations. It is also not a substitute for the benefit explanation booklet published by your company. This retirement planning booklet should be used in conjunction with those materials.

Finally, the principles of retirement planning discussed in this booklet are merely tools or aids. A successful retirement plan requires your active involvement and long-term commitment.

Dynamics of Financial Planning

Financial planning is a dynamic process which starts with the identification of your specific goals. Once this critical phase is complete, pertinent data is gathered and your goals are analyzed in terms of your ability to achieve them. Specific strategies and alternatives which can help you achieve your goals are then developed and documented. A special action plan is then implemented to assure that your overall plan comes to life. Once your plan is up and running, it should be reviewed periodically to assure you are moving toward your goals. These periodic reviews are important because they provide you with the flexibility to address changes in your personal and financial circumstances that occur over time.

The financial planning process helps you develop strategies to enhance your financial security. The effectiveness of your planning process will be measured by the actions you take, your increased understanding and appreciation of the services and products that support your plan and finally by the achievement of your personal financial goals.

If you use this dynamic process approach to financial planning, you will develop a plan that uses your goals as its foundation. Your plan will allow you to obtain objective advice and assistance when you want it and this assistance will respond to your individual circumstances rather than simply being a sales pitch. In short, you are in control of you goals and the plan that will help you achieve those goals.

When approaching retirement planning this dynamic process should be applied to each retirement decision.

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