When we think about retirement, we think about having a lot of time, a lot of money and living our dreams. But do we care about retirement planning? Most of us created a bucket list of things we want to do, when we are old and have more time, such as traveling and exploring the world. But do we plan on how we want to finance ourselves during retirement? And what will happen if our plans do not work out as expected? Did we build enough savings to finance our dreams and do not have to worry about our financials anymore?
After more than 40 years of working, we deserve financial security and we should not worry about our financials anymore. But how can we achieve this? We have to start planning when we are young and contribute every year to our dream of financial freedom.
So I will give you 6 reasons, why you should care now when you are young about your retirement and how this helps you to have less problems when you are older.
1. We are getting older!
Our average life expectancy is increasing and we are getting older than ever before. The average life expectancy in America is about 80 years. This also implies that you need a higher amount of savings to finance your retirement. If you do not plan ahead, you will probably face financial troubles when you are getting older. Start your retirement planning now!
2. You can’t work forever.
Some people might think that they can work forever. But is this really the case and do you want to work your whole life? Sometimes it is just not possible to work anymore and you also deserve it at a certain point in time to retire. If you stop working, your monthly income will decrease significantly and you need more retirement savings to finance yourself. So you have to start building retirement savings at an early age to have enough money.
3. Retirement is the best time to check off your bucket list.
Everybody has created a bucket list of things they want so see, places they want to visit or experiences they want to make. During your work life, you will probably not have enough time to live all your dreams and in your early years, you will probably not have enough financial resources to travel to all the places you want to see. So retirement is the best time to live all your dreams and check off your bucket list. But this requires a good retirement planning to have enough financial resources to accomplish all these goals and this also helps you to have less stress.
4. There are a lot of uncertainties in your future.
We all hope that we have a golden future, but this is not always the case. There are a lot of uncertainties that may arise. You could have medical emergencies, which are not covered or other expenses, which you didn’t expect. These risks can lead to unexpected payments and if you do not have enough money to cover them, you might have to sell your houses. This happens to so many people. Did you set enough money aside to be prepared for such uncertainties? If not, it is never too late to start building savings!
5. Relying on social security and or a pension is risky!
When you retire, you are eligible for medical coverage through Medicare and monthly checks from Social Security. But these monthly checks won’t be enough to cover all expenses for living your dreams. So you need additional funding to finance your bucket list and you will never know, how Social Security and Medicare will develop in the future. Maybe there is a reduction, which requires even more funding. So be prepared for worst cases and build your own retirement fund.
6. Starting early on will help you to accumulate more.
The earlier you start preparing retirement savings and planning for your retirement, the more money you will accumulate over time. This is also due to the concept of compound interest, which means that you will get also a return on your interest from previous savings. So if you start earlier to save money for your retirement, you have to set less money aside and it is easier to accumulate a decent amount over 40 years.
Overall, there are so many reasons why you should start early to set money aside to have sufficient retirement savings for your retirement and the earlier you start, the more money and less stress you will have in your future. Start today to plan for your retirement! You do not need financial planners if you build your own finance education.