Chapter 6, Problem 4AA

To determine

To choose: The best suited option to fill the blank.

Explanation of Solution

Retirement planning is the strategy used to determine the retirement income targets and the activities and choices needed to achieve those targets. Retirement preparation requires the identification of revenue sources, the calculation of spending, the implementation of a savings programme, and asset and risk management. In order to determine whether the retirement income target will be met, potential cash flows are calculated. Depending on whether someone is in either country, any of the pension options change.

Ideally, retirement preparation is a long-term process. An individual can start at any time, but it works best if he begins his financial planning. That is the best way to ensure a safe, comfortable and pleasant retirement. The fun part is why it makes financial sense to pay attention to the serious and maybe tedious part of it: to plan how to get there.

Special retirement plans are designed to encourage people to save for the future.