When thinking about the “retired life,” chances are you’re envisioning golden years filled with leisure, fun, and comfort. Unfortunately, this isn’t the reality for most people because of the financial difficulties or lack of understanding around the shift of responsibility from employer to individual for retirement contributions. This doesn’t have to be the case for you, though. You have the opportunity to live out the retirement dream, but to do so you have to plan for it. Whether retirement is far in the future or right around the corner, the importance of retirement planning should always be at the forefront of your financial plan.
Retirement isn’t just something you stumble upon, a time paid for by the government or a certain age you reach. There’s much more to retirement than meets the eye. Not to mention, retirement means different things to different people, and no two people approach retirement planning the same. It depends on factors including how much money you’ve saved, work history, lifestyle, health and whether it’s possible for you to even retire from work completely.
From leisure activities to living expenses, retirement can cost a lot of money and without a steady income, that lifestyle can be tough to maintain without a plan. Beyond activities and other expenses, planning for retirement depends on factors.
As the average lifespan increases, the reliance on fixed incomes along with threats to Social Security parallel that change. Although everyone pays into Social Security, you need to take into account that there are no guarantees you’ll receive all of that money during retirement. As Baby Boomers retire and retirees live longer, the number of people collecting Social Security benefits outweighs the number of people paying into the system.
Additionally, with retirees living longer, the potential need to pay for ongoing healthcare services poses a threat to retirement. Healthcare, assisted living and other expensive services can quickly deplete one’s life savings. To secure resources and provide for the retired life you want, it’s crucial you take the time to plan and act immediately to provide for your future income.
When it comes to retirement, everyone has their ideas of what it will look like. The harsh truth is without a plan, you’ll be hard pressed to find a way to get to the ideal retiree lifestyle you dream of. The best financial guidance anyone can give you is to start planning early.
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