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Financial independence Planning

   What exactly is financial independence or, as some call it, financial freedom? That depends on your own definition. Financial independence means one should have a certain level of comfort, knowing that one is going to have the financial resources to cover all facets of one’s life, without having to rely on a steady paycheck.

 In other words it does not the age or how much money they have or make. If they can generate enough money to meet their needs from sources other than their primary occupation, then they have achieved financial independence. Age is potentially irrelevant with respect to financial independence

 In a survey conducted in US 44% of U.S. adults said financial freedom meant not having any debt, 26% said it meant having enough saved for emergencies and 10% defined it as being able to retire early. Some others view is that when you are financially independentyou work because you want to, not because you have to.

 

Ways to save

 One of the important decisions to be taken is buy house when you can afford down payment or pay off your home in full, if the same is taken under mortgage. The second one is to find out multiple sources of income for retirement such as interest and dividends from your investment portfolio, give real estate, if any, on rent to augment extra income, do freelance or consulting work at your leisure time or find out time to do it, Social Security, an annuity, and perhaps a guaranteed pension.

 

Keeping expenses low such as don’t go out for drinking dancing or to movies often, don’t spend much on gifts. Plan events such as Christmas gift-less.
Working full time and extra time will make it easy to live that way in retirement and reduce the amount of savings you will need for a comfortable retirement.

 

To find out a place to stay in cities where you can avail the public transport, which is available thereby you need not have to own a car and bear its recurring monthly expenses.

Save 20% of salary per month. Care should be taken to earn sufficiently to save major portion of the salary. Savings to be divided into different varieties such as on stocks and high yielding savings account etc.

After finalizing the above strategies then comes the implementation stage such as:

1. To make an assessment about your available resources after taking into account – the money lying in the retirement accounts, income, if any, – on account of businesses and future income sources such as pensions and Social Security. Also ascertain what is the current saving to enable your retirement spending are on track to achieve financial independence.

2. Select appropriate time and create your lifestyle and financial plan around those priorities.

3. Plan the appropriate time of retirement to enable to have sufficient healthy years to actually enjoy the money accumulated and kept for retirement.

4. After finalizing the time of retirement one should plant to reach the goal after adjusting the monthly expenses.

5. To anticipate future expenses and create a future spending plan, which include health care and insurance policies to take care of additional medical expenses, to complete home maintenance and repair, new vehicles and cost of travel etc.

Conclusion:

It is always better to consult someone who can guide you to plan your finance to enable you to attain independence without depending upon other sources. One of the best options is a website from PBS stations designed to inspire America’s booming 50+ generation to live the most meaningful and vibrant life possible. You can join them online to discover and share reliable information on issues that matter most such as health, finances, care-giving, work and leisure. You will find stories, advice, perspectives, videos, tools and resources from their trusted family of journalists, government experts, and nonprofits and, of course, from PBS. Care should be taken to check the authenticity of the online information.