3 Uncompromising Financial Truths About Retirement
When young people come across the word “retirement,” they immediately skip the conversation because they mistakenly believe they are not yet privy to that discussion. With hot blood in your veins and the whole world at your feet, retirement talk seems like a lifetime away.
Well, bad news for all youths out there: age zips by like whirlwind and the even more alarming fact is that it can’t be stopped by anything. You will soon find yourself in your late 50’s and 60’s and then you will wonder what happened to all the years you once had ahead of you. Woe unto you of you will not have planned for your old age.
The retirement part of your life is meant to be fun. These are your relaxing years with no kids to take care of or jobs to go to. But even in your old age, one fact remains constant — you will still need money to survive. That is why there are so many retirement programs on offer to ensure that you plan accordingly.
Sadly, many people ignore these savings and investment plans and they end up living their last days in total desolation. The following facts are meant to serve as reminders to all of you that money is still king even after retirement; be wise and save for your sunset days.
Retirement Does Not Translate Into Lower Expenses
Some people make the almost laughable assumption that retired people spend less. This is actually the inner voice of denial deceiving you not to skimp on your youthful spending in order to save for your later years. It’s financially illogical to think that your expenses will plummet upon retirement. For starters, it is impossible to predict how you will live or what you will need five or ten years from now; leave alone the far-flung retirement age. It then follows that you can’t possibly estimate your future expenses — the only option is to play it safe by stashing away some sizable savings for that period of your life. Although you will not be paying tuition for your kids or settling a mortgage then, other unexpected issues might crop up. The most threatening woe at that age is poor health.
Naturally, old age comes with many complicated illnesses that demand costly treatment procedures. Not to forget that your retirement expenses can still surge even without suffering any negative predicaments. You might want to take a luxury cruise around the world or to join those fancy collectors’ hobbies. All these fun pursuits will need ample cash, which necessitates a nice retirement plan. Keep in mind, what you may imagine you plan on leaving your children can greatly be reduced by reality and unforeseen events. Retirement planning and trust design is key to living out your years with little or no financial worry.
Social Security Is Not A Feasible Retirement Option
Today’s carefree young folk dismiss the idea of a personally funded retirement plan as an unnecessary expense because at the end of the day they will get Social Security. The grim truth is this tax-funded welfare program is facing a cash crunch. There is no denying that it will be around for many generations to come — but the bitter truth is that the issued retirees’ stipends are continuing to shrink with time. And as mentioned above, your old age expenses might actually increase instead of dropping. The safe solution is to have a backup retirement plan to supplement the little payouts you will get from the Social pension fund.
There Is No Shortcut: You Have To Start Saving Now
The last indisputable fact about retirement and money is that you have to plan and launch your savings and investment plan today. There will never be a better or more financially secure time to start saving. Just spare a few bucks today and put it away for your distant tomorrow. As any certified company offering accounting services in Zanesville would tell you, there are a myriad of investment options and financial benefits associated with retirement plans. For instance, traditional IRAs and 401(k)s are tax deductible and all gains on Roth IRAs are tax-free. Also due to the many years that your investment will grow, the final lump sum will be stupendous.