Thursday, August 27, 2015, AM | Leave Comment
When I was younger, I did not think too much about retirement. The companies that I worked for did have pension plan. To be eligible for getting pension, I had to work for a company at least 10 years.
I never worked for more than 4 years in any company I worked for. I always left a company because I would get a comparable or better job with more money. At the time I thought it was a good strategy.
I turned 65 years old last April. I think the best thing I could have done was to stay with a company for long enough that I would have been fully vested in pension fund. I wish I had something in my name now but I don’t.
The companies that I worked for in the 1980s and later all had pension plan and generous ones I might add. It was not like the present that many companies have quit offering pension benefits.
These days most of us know if we want to buy a car or a house, we must save for it. If we want to live relatively in comfort when we retire, we must save for it.
However, you may not realize that probably the most expensive thing you will ever buy in your lifetime is your retirement.
Retirement is frequently defined as you are paying today for the cost of your retirement tomorrow. That means you are buying into retirement and it’s getting expensive – the price has gone up a lot the last decade or so.
But no matter how expensive it seems now, the young and the not so old ought to buy into retirement now for a more comfortable life later. You must find a way to contribute to your retirement account and there are more than one.
The cost of the future living will be quite expensive for two reasons: American are living longer so embrace yourself for at least 25 years of living in retirement.
Secondly you may have to shoulder a greater chunk of the cost of your retirement because fewer companies are providing traditional pension plans.
Many retirement plans are basically paid by consumers such as 401(k) and IRA. You may not have a retirement plan available at work or you may be self-employed. In that case, the responsibility of choosing retirement investments falls squarely on your shoulders.
Plan for your own retirement saving
Statistics tell us that only 57% of all workers are earning retirement benefits at work. Many are not familiar with the basics of investing. Besides, the misconception is that Social Security will pay for all or most of their retirement needs. That’s simply just not true.
Social Security has provided a minimum foundation of protection since its inception. All indications are pointing to the fact that it will not be enough to live on. Along with Social Security, you need to have employer-based retirement plan benefits, personal savings and investments.
In these economic hard times, many of us live paycheck to paycheck, barely making ends meet. You may have more pressing financial needs and goals than putting your hard-earned money so far in the future.
Perhaps you have waited until close to retirement before starting to save. Yet you still may be able to afford to buy the kind of retirement you want. Whether you are 20 or 50, you can take steps toward a better, more secure future.
Make saving for retirement and other goals a habit. The easiest step you can take is make it a habit to save before you spend instead of spend before you save. In the former case, you always save. In the latter, you seldom save. Remember, there is no such thing as starting to save too early or too late. Not starting at all must not be an option.
In a Nutshell
Paying for the retirement you truly desire is ultimately your responsibility. You must take charge. You are the architect of your financial future. Retirement is a big purchase, bigger than buying a house. Yet you can afford it – with determination, hard work, a sound savings habit, the right knowledge, and a well-designed financial plan. Talk to a good financial adviser.