1. Retirement planning can save you from many stresses
On the one hand, financial stress is one of the major sources of stress that can take a toll on your physical and mental health, leading to diabetes, heart disease or even depression. Retirement planning, on the other hand, can have a beneficial impact on your physical and mental health.
2. Retirement planning is a good reminder for financial planning
Retirement planning is important not only because it can greatly reduce your chances of running out of money when you retire, but also because it may become an excellent reminder for you to make better financial planning. Your retirement planning can help you calculate the rate of return and risks on your investments and the amount of money you can safely withdraw from your investment portfolio.
3. Retirement planning can help you pay less tax
Retirement planning is a good way to prevent excessive taxes in retirement. Since there is no way to predict future tax policy, it is advised to diversify the sources of income. Your control over the sources of income in retirement may help reduce your taxes. With proper planning, you may be benefited from programs such as 401(k) and IRAs.
5. Retirement planning can make early retirement less scary
If you are forced to retire early for a variety of unforeseen reasons such involuntary unemployment or the need to care for an ill or aging parent, a reasonable retirement plan can give you more time to improve your situation since the funds set aside for retirement will give you more time to adjust.
6. Retirement planning can reduce burden from your kids
A comprehensive retirement plan can help you save for future medical and caregiving expenses that may arise, so that such burdens don’t fall entirely on your family later.