Why Plan Now for Retirement?
If you are tired of working now, just imagine how hard it will be to go back to work when you run out of money during retirement. Even in your 70s and 80s, you would still want to travel, eat out, and have a place to call home. But unlike a steady salary that you get now, you will need a retirement fund to shoulder the responsibilities of your expenses once you retire. After all, it is you who has to look after yourself.
While you are working, many of your out-of-pocket expenses can be covered by your employer. This may include meal coupons, healthcare costs, and travel costs. However, once you retire, it’s difficult to bear the brunt of all your expenditures.
If you wish to spend a quality life post-retirement, then planning for it should be a priority for you. In order for retirement planning to be successful, you need to understand your income and assets that will support your lifestyle in the future. Gaining this knowledge will allow you to manage your resources and help you save and invest wisely.
If you do not have retirement plans yet, now is the best time to start. Here are some reasons why you should start providing for your retired life at the earliest:
1. No One Can Work Forever
According to a recent survey by the Associated Press-NORC Center for Public Research Affairs, 23% of today’s working class doesn’t ever wish to retire while another quarter expects to work even after 65.
It is impractical to think that you can work forever. However, some people dream of working till their last breath, which can be difficult to achieve. With age, your health is bound to deteriorate. No matter how many years you work for, saving for retirement is crucial. Without a substantial retirement fund, you’ll be trapped in your “work forever” plan with little or no respite to enjoy life
2. The Average Life Expectancy Has Increased
On an average, people now live longer than before. Gone are the days when the average life expectancy was just 60 years. Today, the average life expectancy has increased to nearly 80. Hence, people need more funds for their future.
Going by these trends, you may have more years of retirement than you think. This means that you need to save more and plan for a longer period of time, not just for you but even for your spouse. The earlier you start, the better are your chances of having sufficient retirement funds that can last you a lifetime. Always aim to save extra. Nobody can predict the future, but being prepared for the best and the worst is important.
3. It’s Time to Get Things Off Your Bucket List
We all have that big list of places to visit, cuisines to try, and other things to do that we reserve for retirement. During our early life and working career, we are burdened with responsibilities and debts that can make it difficult to fulfill these dreams. Whether it is the burden of student loans, expenses of your children, or paying mortgage, there are often situations that hold us back. But a well thought off retirement plan can ensure that you enter your golden years with none of these worries and have enough funds to finally chase your dreams.
Have a comprehensive financial retirement plan eliminates stress and helps you achieve your goals. A major benefit of retirement planning is to be able to live fully. You no longer have to worry about making ends meet.
4. Dependence on Social Security Can be Perilous
Retirement makes you eligible for low-cost Medicare benefits and Social Security perks. While these benefits are an added advantage, you cannot be completely dependent upon them. Pensions are also not enough, in times of need.
Proper retirement planning, that includes finding other ways to save for retirement, is necessary to cover any long-term care that you may require later in your life. Medicare may not fund every form of care, so Required Minimum Distributions from retirement accounts, along with a good insurance cover, can become your safety net to pay for in-home care or nursing facilities.
5. Nobody Has Seen the Future
It’s good to be hopeful about your finances in the future, but it’s not something to rely on. The future is not guaranteed, and you can face a financial crisis anytime in your life. There will be stumbling blocks on the road ahead, but having a retirement plan in place will help you deal with them.
6. Retirement Plans Can Support Your Family
As an earning member of your family, supporting your loved ones is an important facet of retirement planning. Having a systematic plan in place will not only prevent you from becoming a financial burden on your loved ones, but may also enable you to help your children or grandchildren with college expenses and more.
To Sum it Up
Calculate your expenses, account for inflation, estimate healthcare costs, and eliminate your debt burden, before you start saving for your retirement. Ticking all these boxes is important for a fruitful result.
Saving funds for a desirable retirement may take years, depending on your income. By starting to invest in your retirement early, your funds get more window to grow over time, leaving you with a substantial amount of money to meet your future goals. We all know that life is uncertain. However, with a thoughtful retirement plan, you can guarantee your financial security.
Do you need help to plan a stress-free life post-retirement? Reach out to financial advisors for guidance.