Retirement planning then, and now
Never too old to ride a bike; never too young to plan for retirement
There was a time when planning for retirement was relatively straight-forward. A person simply worked at a job until age 65 and then retired to live off pension plans and Social Security benefits. This was the reward for years of hard work with one employer and paying into a dependable government-sponsored retirement fund.
Life has changed
Much has changed in terms of retirement planning and benefits. Years ago, life expectancy for most seniors was much lower than it is today. Today, people are living longer, which is good news. On the other hand, retiring at age 65 isn’t always financially feasible with people living to age 90 or longer. As life expectancies increase, it becomes more difficult to acquire adequate funds for a comfortable retirement.
Jobs have changed
Today, most people change jobs or careers several times during their working years. In many of these jobs, pension benefits do not exist. To compound the problem, Social Security benefits have not kept up with cost of living increases, and most people cannot live comfortably on them today.
Health care has changed
The problem becomes overwhelming when you add health care costs to the mix. Health care costs, especially for older people, tend to be uncertain even as they continue to rise. Because of this, the future support of many elderly individuals is in question.
Have you started to think about your retirement?
With all these retirement issues facing every person in the United States, it would seem reasonable that we would find alternatives to existing retirement plans and begin saving money for our retirement years. Planning ahead makes sense, but a lot of people are at a loss when it comes to taking action.
Plan for the worst, hope for the best
Experts agree that everyone should begin their retirement planning by assuming the absolute worst-case scenario. We should assume that Social Security benefits will not be available or, at least that they will not be sufficient to support us. Also, we should assume that medical care will create a significant financial burden. No one hopes that these worst-case scenarios will materialize, but we should plan as though they will so that we are prepared. In the unlikely case that they assumptions don’t materialize, we’ll have more than enough money to live on, and what could be wrong with having a little extra to do the things you’d like to do?
Plan for a comfortable retirement
Here are a few suggestions for insuring that your retirement is a comfortable one:
Start an emergency fund. Save as much as possible or, at the very least, have six months of living expenses in a savings account earmarked for emergencies. If you’re like a lot of people today, your living expenses may exceed your wages or salary and you may have to rely on payday loans or credit cards to get through a month. When you figure out how much you need to save and set aside, consider your actual living expenses and not just your income.
When available, participate in your employer’s retirement plan. If you don’t have a retirement plan at work, invest in an Individual Retirement Account, (IRA). Sometimes employers will match a portion of the contributions you make.
Set financial goals and stick to them. Many people dream of sending their children to college, retiring early, and traveling the world. The reality is, however, that these things will not happen without proper planning. Taking the time to sit down and seriously assess the financial backing that will be needed to support these goals, and then creating a plan to invest and grow money over time is the only way to make dreams like these come true.
Start planning now!
Almost everyone who lives long enough will eventually have to retire from working. Some people look forward to retirement, while others dread it, fearing that they won’t be able to survive. The sooner you start to think about and prepare for retirement, the better off you will be. Retirement planning is not just for the elderly. The more time you have to plan and the more time you have to save, the more you’ll look forward to the day you retire, so the best time to start planning is right now.
