Begin Your Retirement Planning Now
Many people may wonder when is the best time to begin your retirement planning? The best time to begin is when you first consider it. Sooner is better than later. Retirement planning comprises mostly financial aspects, though you may wish to consider what lifestyle you’ll enjoy having too. This can impact how much money you need to save for that gap between now, and the first day you retire.
There can be pitfalls to relying on an employer’s pension plan, or a government pension plan to support you after age 65.
Most people today switch their jobs every six or seven years. This could mean that the employer pension plan you had been relying on may need to be cashed out, leaving you without an account that accrues interest. Not every company has a pension plan either. Or, what if you choose to work part-time? This means the onus is on you to save up for your own retirement.
The reasons should be fairly obvious on not counting on a government pension plan when you retire. For one, you never know if it will be there for you. There are predictions that the whole thing may tank, and it’s not just in the USA either. In Canada and the UK, the country’s pension plans are becoming a financial burden as more baby boomers retire.
Besides the fear that the pension plan may not be available to us when we retire at age 65, there is also the issue of amount. Perhaps in our grandparent’s time they could live comfortably on a monthly pension. But today, with inflation so high and everything else along with it, that pension may barely cover rent or boarding costs. How will you pay for your food, health care, and utilities? You’ll need to have some form of supplemental income at this time.
Many millennials have the belief that they’ll never be able to retire. They’ll still be collecting that pension, but they’ll still be working past age 65. This may be frightening, as jobs won’t be opened up for younger people.
These reasons are why, no matter what your age, you need to begin your retirement planning today. This is one instance where it can never be too early to begin. The more money you have earned by age 65, the more money you’ll have to live on.
Another great thing about saving money for retirement is that interest can accumulate on interest. This is like doing no work at all, but still earning an income! To get started, you can sign up for automatic payroll deductions that take a portion of your income and move it into your retirement fund. When this is done automatically after every check, you won’t miss the money.
Your chances are increased for a happy retirement if you can move money into your retirement fund on a regular basis. Don’t neglect the important task of retirement planning. You want to be financially independent at the age of 65, because you’ll have earned it!
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