7 Reasons To Prepare For Your Retirement As Early As You Can

Reasons To Prepare For Your Retirement As Early As You Can

Whether you know it or not, your retirement plan is probably way off course. To make matters worse, there are now 80 million Baby Boomers approaching the traditional retirement age of 65. Most people think that they will retire at 65 and live to be 68 before passing away. This is a thing of the past; we need to prepare for our future as soon as we can.

Retirement planning has changed drastically over the last decade, and most current plans (and those of people close to retiring) will provide little more than bare-bones living – if that. If you don’t want this type of life in your golden years, it’s time to reassess the way you save and prepare for retirement.

1. Longer life expectancy

You have a much longer life expectancy now than 20 years ago. In fact, those over 65 now have an average life expectancy of 82 – so as not to sound too morbid, this means that if you live to be 75, your retirement will need to support you for twenty years rather than ten as it used to. The simplest way of preparing for retirement is by making sure you’re investing in a 401k, 403b, 457, or other tax-advantaged retirement accounts regardless of your age or income level. Most employers will match what you contribute up to a certain percentage, so it’s usually worth putting at least enough to get the max out of your employer. If you can’t do this right now, start small and set up an automatic deposit through your bank or with your HR department so that you don’t forget about it – but even $50-$100/month starting early may be enough to retire much sooner than expected!

2. Health problems or disabilities can happen anytime

The number one reason people leave the workforce is due to health problems or disabilities – which can occur at any age. Retirement planning must therefore take into account the possibility of a person becoming unable to work at some point during their retirement years because although many pension plans currently will pay out a lump sum on disability, most do not take into account the rising cost of living as costs continue to increase. To safeguard against these uncertainties, preparing a separate health insurance or life insurance plan can be an effective backup.

3. You’ll be needing more than a retirement investment in the future

Retirement investments such as pensions and 401ks are unreliable. In fact, many plans that existed just a few years ago have now been cut back – for example, those who invested in traditional pension plans will now find themselves with only $300-$500 per month rather than the previously promised $1000+. If you haven’t already done so, it’s time to make sure you’re covered by other means, like an IRA or Roth IRA (individual retirement accounts).

4. Government-sponsored programs may not stay stable

Government-sponsored programs such as Medicare and Medicaid may not be available to support your retirement if the country faces another major debt crisis. The government has made no promises that these important services won’t be cut entirely at some point in the future.

There’s no way around it – the country is suffering economically and if you think that this means you’re ‘off limits’ then you’re doing yourself a major disservice. We could be facing another great depression in the coming years or decades, which means that it’s more important than ever to start planning for retirement now rather than later. If you wait too long and something interrupts your ability to save and invest money, then it might be too late to ensure a worry-free retirement at all.

5. Invest in stocks

The stock market has seen better days, so if you are depending on your investments to fund your retirement, there’s a good chance that your money won’t last long enough to cover all of your expenses before depletion. Still, investing in stocks is a good backup plan for your retirement.

Although the stock market has taken some major hits recently, you can’t afford to not be invested in your retirement accounts. Many stock market analysts are saying that now is the time to invest because stocks are selling for much cheaper prices than they have in recent years. However, if you wait too long, then you may miss out on the opportunity when it comes back around.

6. Selling your home may not be sufficient

Your home may not be as valuable as you think it is. If you’re counting on selling it to help pay for retirement, think again – many Baby Boomers will find themselves saddled with mortgages well into their 80s and 90s unless they were smart about paying off the loan during their working years; however, this doesn’t mean that owning a home isn’t still an attractive option (even one with a hefty mortgage) because studies show that people who do own homes enjoy a higher quality of life in retirement, even if they have to continue to make mortgage payments.

7. The cost of living continues to increase

The cost of living has gone up astronomically over the last few decades, which means that you’ll need more money to maintain your current lifestyle in retirement than your parents had. If you want to travel more often or indulge in some luxuries after leaving work, it’s important to plan for this now rather than later because of the way things are going with our economy…you may get stuck working longer than planned just so that you can enjoy yourself in retirement without suffering too much financially.

The best time to plan for your retirement is as early as possible because our economy isn’t looking so hot right now…and there’s no telling what will happen down the line, so being prepared with no regrets beats being stuck working longer than necessary just because you wasted the best years of your life feeling too guilty to stop working.

Retirement planning is something everyone should be taking part in, but Baby Boomers especially need to reassess how they save and invest their money in order to make sure they are retiring comfortably in the future. With all the points here being said, don’t listen to anyone who tells you that retirement planning is pointless…because it’s not! Even if you’re facing financial hardship now or are living paycheck to paycheck right now, you can still save money that will be worth something by the time you retire, so never write off saving for retirement as an option no matter what stage in life you’re at currently.

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