If you’re in your 20s or 30s the last question on your mind may be “When should I retire?” But the truth is, planning for retirement should be a priority for everyone at any age. Maybe it won’t be a top priority, but it should definitely be on your list of financial priorities if it’s on your list of things to do in life.
When to retire
When to retire is a question that many millennials ask, and it’s a good question because your retirement date is different than the next person. Just like the definition of a happy retirement is also different for everyone. When to retire depends on a variety of factors from how much money you can save, to how long you’re physically (and mentally) able to work as well as how much money you need to live during retirement based on the lifestyle you want to have.
If you want to retire early then you’ll need to save more during your working years. If you start saving as early as possible you can save less money every month because with the right investments (and good luck with the market) your money will grow over time.
Why should I save for retirement
It’s important to save for retirement because we all want to stop working someday. Unfortunately, government benefits may not be (and probably won’t be) enough income to support your living expenses during retirement. Investing your own money as well as taking advantage of employer saving plans such as a 401 (k) are great ways to help plan for retirement.
You’ll also want to ensure that you save or plan for your funeral and final expenses, to ensure that your loved ones don’t have to deal with the high costs of your funeral at the same time as grieving for your passing. Look for a reputable plan that best suits your needs, rather than the cheapest 995 plan, which will likely be too good to be true.
I understand that as young adults we have other goals that we want to achieve before retirement. The younger you are the less of a priority retirement planning will be, however the older you get the more you’ll have to save and that can be restricting on your budget. That’s why it’s a good idea to start saving for retirement as soon as possible.
How to start planning for retirement
If planning for retirement isn’t a priority when you’re young then you won’t allocate a big amount of your savings budget into your retirement account. However as you get older and achieve all your other goals you’ll start saving more for retirement because it will become a priority.
The best way to start planning for retirement is to talk to a professional. Talking to a professional will help determine if you’re saving enough based on your retirement goals – or if you’ll be able to afford the lifestyle you want based on your savings. It goes both ways. If the numbers don’t match up you’ll have to start saving more, prolong your retirement date or plan for a lower income during your retirement years.
If you haven’t started planning for retirement yet and you’re not sure when to retire there’s no time like the present to make a change. Open a retirement account and start saving today. Even $50 a month can add up to a lot of money over 30 to 40 years.
So what are you waiting for? Start saving for retirement today.