Depending on your age, a retirement plan may not be very high on your priority list, but, that doesn't mean that it shouldn't be. In fact, if it hasn't been on your list at all, then you may want to incorporate as soon as possible. Planning for your retirement is far more important, and worth the time than many people care to think it is. In fact, it is so important that your life may depend on it.
Think about your daily life now. What are some of the things that you like to do on a regular day, or on a regular basis? Do you like to purchase good CDs or books? Do you like to take a yoga class? Do you like to spend time with friends and family at the movies or on trips to the mall? Do you like to travel? Now think about some of the things you regularly need to do; things like putting gas in your car to get to and from a family member's house or to the grocery store, buying groceries, maintaining your car, paying for rent or the mortgage, paying property taxes, paying regular monthly bills.
Each person's lifestyle is different, but these are some of the typical things that the average person does on a regular basis throughout their lifetime. Now, think about the tool that makes all of these things possible. Money. Now, think about where the majority of people get the majority of the money to carry out these actions. Their income. Now, imagine if your source of income disappeared...
If you're fairly young, you might say, "Oh, I'd just have to stick out the tough times and have family help me out until I found another job, or started my own small business." These are both very logical and practical solutions to the problem, if it is a temporary problem. However, what if you lose your source of income and you are old in age, or with minimum skill for a career change? What if you are near the standard age of retirement, at 65 or 67? Where are you going to get the money to take care of your daily activities? How much money will you have saved up for retirement?... Do you expect to work forever? In this case, more than likely you won't be able to just "stick it out" easily. This is why retirement planning is vital. Whether you want to venture out on running a family business after you stop "working" and retire or not, is up to you. In any case though, you will not want to depend on an income to take care of you when you are older and more at risk for success in conducting labor in the marketplace. If you continue to work at an old age, it should be because you choose to, not because you need to in order to survive. Just as many people want to live a life of security, stability, and fun at a young age, at an old age, this will be a necessity, as the rest of your life will be, well... all that you have left.
Who wouldn't want to know that they can finally kick back and relax on the road to who knows where? You do believe in life after working, right? Know one wants to live with the stress of wondering where they are going to get money to survive. No one. I'm sure you would rather live comfortably knowing you can pay for all of the things you need, and even the things that you want, focus on your health and enjoy the rest of your life. You'll want to spend stress-free time with your children and your grandchildren. You'll want to be able to continue to go through your own daily life activities, whatever they may be, with assurance that you can do so with ease, and, in this world, that means having the finances to do so. In this case, you will no longer be getting the majority of this money from an income, but rather from money you have secured for this time of your life. This could include any money you have saved up with in retirement plans and other savings, and maybe other liquid assets you could sell, and unless you have developed a system where you have a substantial amount of residual income coming in, then this might be it as far as where you will be taking money from for your living after retirement. It is not advised to count on Social Security to be enough for your living. In fact, some say that it might not be available in some years to come. Regardless, social security wasn't created to be one's main source of income. It was more so created to be supplemental. If you research the numbers on what the average amount a person receiving their social security benefits gets, as well as the maximum amount one is allowed to retrieve per month, you will see why.
Do you have a retirement plan in action? If not, no matter your age, (but, the earlier the better), it's time to start one. Let's face it, the average person does not accumulate large sums of money as an income consistently throughout their life (the average person does NOT). Unfortunately, they are working hard just to SURVIVE, and even more unfortunate, many are ignorant to planning for at least the survival of their future...life after working. So, the LEAST the average person can do, is contribute to their survival in the after life...the life after work that is. Why does this need to be done through structured retirement planning? Mostly because it probably wouldn't get done otherwise. Through structured retirement planning, individuals can gain the discipline to rank contributions to their retirement funds equal to paying their normal bills, (maybe even of higher importance), allowing them to build a nest for their life in retirement. Incorporating these types of plans into ones life provides them with the discipline (or at least the opportunity for one) that most need in order to create a financially secure future, and the money put into these plans through financial institutions has the chance to compound from the return rates provided within the plan. Granted, starting a plan can be just as demanding as any other bill, but, the value of the plan can not be overlooked. With the government providing attractive contribution limits as to how much money you can put into these TAX SHELTERED growth funds, these plans can serve as a motivating factor and give you even more reason to think about increasing your earning potential for this very reason...which will only serve as more leverage for your financial growth potentials.
I know how easily tempting it could be to dip into any savings you might have. In fact, this is probably the number one reason many people do not even have a good amount saved up! This is not to say people don't save at all. They save for short term things. This is what I call acute saving, when a person saves a certain amount for a short term with the intentions of spending it all at once to acquire a specific item for which they put the savings in place for. For example, maybe you have saved up for a down payment for a car before. Unfortunately, many people don't practice long-term savings as much as they do acute savings. If you have a retirement account already, then you know what I am talking about when I say long-term savings, a savings created for longevity benefits with its purchasing uses not being "item specific", but rather the purchasing power being substantial. Examples would be a fund created for retirement or emergency. A retirement plan can give you a good standard form of this type of long-term savings. After all, you want your purchasing power to be secure when you have retired. No matter your income today, or in old age, having structured retirement funds in place has its benefits. It might be the most secure type of account that you can have that's aimed towards funding your life after work.
Of course, you can use these funds for certain things like down payments on homes, funding a child's college tuition, but there are restrictions, and these things are not the goal of the account. There are even withdrawal penalties for withdrawing money before a certain age. The purpose of these accounts are to provide some preparation and protection for your financial future, and THAT is EXACTLY what you should be doing, if you haven't done so already.
A retirement fund not only provides you with a goal, but with a plan of action as well. This is what, unfortunately, a lot of people who are nearing the retirement age don't have in place well enough, and why a lot of this age bracket is working beyond a reasonable age to be working, struggling, and not able to live their life as they could be if they had started planning for this stage of their earlier. This is not the best side of the coin to be on. People like to say that America is one of the best countries to live in. In my opinion, what good is living in a so-called "best country" if you don't make the BEST of it's opportunities. To get the benefits of America is like getting the benefits of beneficial knowledge; it's almost worthless if you don't find a way to apply it to your life.
In the retirement world, you may here the phrase, "It's too late". However, if you have your health, and some sort of income, then you still have an OPPORTUNITY for some growth. By the way, if you are in your 20s, I hope you don't blindly think that it is too early to even care about this. I hope you don't think it's something you should put off until you are "ready" to deal with it. That would be a mistake, that the older version of you would not be too proud of. No matter your age, as you make the most of the present, don't miss out on the importance of valuing your future. The level of your aggression towards putting action to this advice is certainly up to you.
Throughout your life's journey, you owe it to yourself to acquire a discipline in this society that pays you until the very end....and maybe even after.
The younger you are, the more foreign this is all probably sounding to you. That's ok! The first step is opening your mind to this knowledge that is sadly not imposed on us until it is too late. The fact that you have read this far means that you are able enough to get prepared to plan for your financial future! The best of all, you have time on your side. Take that to your advantage, and retain all the knowledge that you can know, and, over the years you will appreciate yourself for doing so. Another thing, any financial advice or information you take from my site, others', a financial book, advisor, or any other valuable research on your own, remember that there is one step that you will always HAVE to take in order for any of the knowledge you get to be of value to you. You MUST apply the knowledge. This is the only way that you will be able to asses it in your life, judge it, or gain any results.
With all of that being said, I will leave you with some good reasons to contribute to retirement...
Reasons to Contribute to Your Retirement
- If you can take the time to plan now, especially, if you are young, you can gain an advantage over life's most common struggle.
- Protect your future and well-being.
- Protect your family. Protect them from carrying the burden of taking care of you.
- Show that you value yourself.
- Living in retirement will likely be the most costly thing you ever do in life.
- People are living longer. Your retirement years may be plenty.
- Fully enjoy the last years of your life.
- Take responsibility.
- Teach your heirs good habits.
- It wont happen unless you make it happen.
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