When you are in your early twenties, it seems as if you will always be young. At this point in your life, you may have completed your university studies and now you are out there in the work world, or perhaps you are still studying towards a further qualification. You may be newly married at this point, or still waiting to find the Right Spouse before tying the knot. Whatever you are doing, retirement may be the furthest thought on your mind.
However, retirement will not stay on the horizon forever. Before you know it, the years pass, and you will hopefully find yourself established in life with a career and family. You have a definite professional path, and you are working hard to put food on the table and make sure that you, your spouse, and children have everything you need. The only studies that you are thinking about now are your children’s tuition fees. And this is how it goes, as the years pass. The nature of your needs and goals will change through life – until the time comes to retire and enjoy the fruits of your labors.
For this reason, it is important not to let the years run by without planning for the future. No matter how old you are, whether you are 20 or 55, you need to make sure that you have a pension plan and to put some of your money aside into savings and investments. Since there is no guarantee that your company’s pension plan or the government’s pension plan will be enough to cover your retirement needs, it’s important to have a personal savings plan which could make up the (potentially large) shortfall. No one wants to end up dependent on the goodwill of their children, who may well be supporting their own families by this time.
Of course, every family has its own situation, levels of risk, and specific needs and goals, which is why you need to find the pension plan that is the best for you, whether it’s an IRA, 401(K), or any of the other options that exist out there. There are many different factors to consider. For further ideas on how to plan for retirement, read http://profileperspectives.com/dont-let-retirement-creep-up-on-you/.
Planning for retirement now, while you are young, can make all the difference to your future.Doug Goldstein, CFP®