Why You Should Do It NOW
If you are as yet questioning why you should save up for your retirement, perhaps the realization that you can’t work forever will be enough encouragement for you.
Like it or not, you will reach a point in your life where you don’t have a lot of money coming in, and you will somehow have to get by with whatever money you have squirreled away. Hopefully you will be covered for any eventuality by this point, and will have some money set aside for any unforseen emergencies as well.
What about Social Security?
Don’t think that you can rely solely on your Social Security pension to live on when you retire either. While your Social Security will give you a fairly respectable base for your retirement savings, you will have to augment this in some way, whether with a job related pension, or with a savings plan offered by your company or one that you will start up on your own using your own funds. Either way, you will want to have some money set aside for a comfortable retirement.
Living Expenses in the Future
It can be quite disheartening to realize that living expenses don’t necessarily go down when you retire. There is always the threat of inflation to worry about, and the rising property taxes could result in a corresponding increase in your housing costs as well. In addition, advancing age comes with it a host of health issues, all of which may result in higher medical costs or at the every least, a jump in your health insurance premium.
Can You Work Your Way to Retirement?
Don’t automatically assume that you will be able to work for as long as you are able to either. A 2007 study showed that as much as 37% of all retired respondents have had to retire earlier than they would have wanted to either because of health issues or company lay offs. In order to make sure that you are protected for any eventuality, it would be best to start planning for your retirement as early as possible.
You Need To Live Without an Income for a Long Time
Here are some figures that may drive the point home a little more clearly. If like most people you plan to retire upon reaching 65 years old, you have a 50% chance of living 15 more years, and even longer if you are a woman. There is even a 25% chance that you will live to 90 years of age, and a 10% chance that you will live to be a hundred years old! That can be quite a while to go between retiring and kicking the bucket, and going through those years can be quite a challenge indeed if you haven’t planned your retirement properly.
One of the most valuable tools to have at your disposal is the 401(k) plan. This retirement plan is paid for with funds that are deducted by your employer every payroll. These funds can be invested in a number of ways offered by your employer, or you could get a broader range of investment options with the 401(k) administrator. In any case, the 401(k) plan gives you an easy and convenient way to use money you are earning today and earmarking it for your use when you will need it the most.
Are you doing anything to save money for your retirement?
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