Retirement planning. A scary thought, isn’t it? It is easy to feel overwhelmed by the information available.

Careful consideration of just a few topics can simplify the planning process, without jeopardizing your future.

First is the withdrawal rate. This is the amount of money you will need to withdraw each year to supplement other retirement income such as Social Security.

Divide that figure by 0.05 for one calculation of your estimated total retirement savings need.

The next issue to address is the rate of return. A good rate of return is dependent upon a healthy mix of stocks, bonds and cash investments. Over time, stocks typically have a greater rate of return, but can be associated with higher risk.

Bonds often carry lower risk, but tend to have a lower return on investment. Risk acceptability is highly correlated to the age of the investor.

Younger investors can feel better about assuming greater risk than older investors. Your investment advisor can help you determine what percentage of your contribution should be allocated to stocks, bonds and savings based on your remaining years in the workforce coupled with your desired withdrawal rate.

The final issue to consider is your life expectancy. How long do you think you will live? No one knows this for sure, but an honest assessment of your lifestyle, your relatives’ life spans, and the medical histories of yourself and your close relatives can help you to make an informed estimate.

Your life expectancy, less the age at which you expect to begin withdrawing supplemental retirement savings funds, will give you a figure which can be multiplied by your planned withdrawal rate for another estimate for your total retirement savings need.

The point is start planning and saving for retirement as soon as you can, each day counts so the sooner the better. Remember that it is never too early, nor too late to start securing your financial future.