Planning for your retirement involves a great deal more than buying a retirement home, charting a course for the open sea in your very own yacht, or, as most as most forward-looking people do, having children. It’s also a lot less complex than you may think.
At the end of a long career, many of us have dreams about what we want to do with our free time. Some people want nothing more than a quiet river to fish in, and a porch to sip whiskey on. Others hope to put their free time to good use, helping out with charities and nonprofits, or even starting a new career as a teacher. No matter what your goal, planning for your retirement is one of the most important things you can do to make sure that your dreams come true.
The baby boom generation is nearing retirement and it is clear that millions of aging boomers are financially under prepared. Reasons are many – poor savings habits, rising medical costs, the demise of guaranteed corporate pensions, and the dreaded squeeze faced by many boomers: i.e. having to pay college costs for their children, care for their elderly parents, and save for retirement, all at the same time.
Devoting an adult lifetime adroitly acquiring assets goes against the grain for many persons. Whatever they attain in life will come with minimal expenditure of time and effort. To that end, I have a program to offer, though it requires a caution: What I advocate will enable most persons to conclude their working years with enough to live in the style to which they had become accustomed.
Let’s face it. Unless we’re going to inherit great wealth, we’ll need to tuck away some money. And, if you’re still reading, chances are you won’t inherit from your wealthy relatives (smile).
If you have a hard time finding the motivation to start saving money, consider challenging yourself to tuck away what you save. It can be very motivating to watch your money grow. Set up a special savings account to make weekly deposits of what you have saved from your money saving efforts.
In an ideal world you would start your working career with a great company in your early 20s, steadily climb the corporate ladder, retire at age 65, and draw a sufficient income from your accumulated 401k account to live happily ever after.
The real question when it comes to retirement savings isn’t “How much should we save?” it’s “How much can we save?” It’s impossible to estimate accurately what you’ll need in retirement and how much to save monthly in order to have that cash. But you can try to align your savings with your priorities (saving more if retirement is a higher priority, less if it’s a lower one). And you can make smart decisions about how to make the most of that savings.