An essential part of any financial planning is retirement planning. People often neglect this one factor until it is too late to make amends. It is crucial to plan for retirement and particularly so for those people who are seen to be vulnerable than others. So why is a retirement plan so important? Not everyone is covered by social security. Often the sums being paid out in social security do not cover more than life’s necessities. Thus, a tool that can help plan out and coordinate for a retired life’s finances needs to be taken seriously. In this case, FIRECalc is a perfect solution.
FIRECalc is more than a simple tool. It stimulates the different scenarios that can come up from historical data that goes back to 1871. Thus it would be a fair projection of anyone’s needs, particularly those earning a fixed income each month. Since it is a simulation program, it is possible to render some of the most realistic simulations possible. It leaves the users with useful insight to prepare future incidents with confidence.
Why people need retirement planning
There are many pros to making plans for retirement and providing for early retirement if possible. We must point out that there are some popular models when it comes to simulating future spending patterns and roles that calamities play in the formation of the corpus. Below are some of the main focus points of active retirement planning and the pressing need for one.
Stress-free life with FIRECalc
This would be the most significant take away from a proper retirement plan most of the time. The person doing the planning can rest in knowing that it can take any eventuality care of as it has been duly provisioned into the plan. The investments made would also take care of retired life and provide the client with trouble-free retirement years.
Make money work for you
Our lives’ active years are when people work from 9 to 4 every week to make ends meet. Post-retirement would not be possible for folks to work this hard. Most people would want to lead a worry-free life post-retirement. It is thus essential to start early enough so that the portfolios can have the advantage of an early start. They can cash in on the power of compounding that securities often command.
Most countries worldwide and including the United States, provide tax benefits to those investing for the future. One class of investors can be relied on to keep their money parked in good companies’ stock for years on end and not act as speculators and the likes. Every market seeks to take advantage of the informed long-term investors by providing tax breaks, and it pays to take these advantages to the full extent.
The best of retirement planning would at the least try and beat the inflation expected to prevail with the passing of the year. Inflation is one head that would eat into future spending power. This needs to be taken care of in all circumstances. People who do not plan for inflation would see their money being eroded in purchasing power over time. With FIRECalc, it is possible to contain inflationary trends quite early on. It has to do with the realistic simulation that the program does, keeping the past as a good record. Few applications give this sort of coverage and options to the user.
The retirement years are significant in that those are years when the income is practically nil, and expenses tend to mount. It is the money that has been set aside for such an eventuality. That is going to see people through their years.
What is FIRECalc?
It is wrong to assume from the name that Firecalc is a retirement calculator. More than that, the software is a means to plan for the retirement years by picking up a good performing portfolio. The platform can stimulate the past historical events from as back as 1871. It works to the advantage of the user all the time.
How does FIRECalc work?
At the heart of FIRECalc is an active portfolio and its management. There are three columns to be filled to start. The years to retirement, the retirement spending, and the retirement portfolio value. Once these three are filled, the software would calculate what needs to be kept aside toward a person’s retirement years.
It would be noticed that the longer a person has towards retirement, the lesser his money that has to be kept aside becomes. Every portfolio has inherent risks. With FIRECalc the sums of money are invested as 75% in stock index funds, 25% in debt instruments, and charges a 0.18% fee on the total portfolio value per annum toward managing the fund.
The system takes two presumptions while calculating the funds for retirement. The very first is that the spending remains the same pre-retirement as with the retirement days. That is, the lifestyle is protected without fail. The second presumption is that the person using the system does not have the means to social security payments or pension.
We must stress that the calculations on FIRECalc are done by taking specific financial scenarios into account. In most instances, the simulation would serve the purpose. With enough historical data present to the system, it can hardly go wrong. But caution must always be exercised by the user as it is, he that is going to reap the benefits and pitfalls.
Provisioning for retirement, how early or late it happens, is a very tricky business. FIRECalc takes most of the uncertainty away from retirement planning and gives a definitive plan towards building up a corpus. It must be stressed that like all future planning, no matter how sophisticated the software, there is bound to be a little slip between the lip and the cup, and customers must be prepared for the same.