Retiring is one of the biggest changes we face after spending the majority of our lives working. It gives us the gift of more free time, but there are also challenges. We lose our regular income, our health tends to decline with age, and we lose a lot of our career structure and social connection. Nobody can predict what the future holds, but by taking the right steps early in our careers, we can increase our chances of enjoying a much more comfortable retirement. If you are still not convinced, here are five reasons why you should plan for your retirement sooner rather than later.
- You probably don’t want to – or won’t be able to – work forever
Most people do not relish the thought of working for the rest of their lives, even if they enjoy their jobs. Of course, some people might not intend to retire as they prefer to be busy, but they might find that their health deteriorates so much that they cannot continue to earn an income. Relying on your Social Security benefit alone is unlikely to provide enough income to support you throughout your old age.
- The sooner you start planning, the more comfortable you will be
Planning for retirement is something that many people put off until they are only a few years from retiring, but to increase the likelihood that you can live a comfortable and financially secure life, it is smarter to start planning early. The earlier you start, the more time you will have to save, and the more time your investments will have to grow. There are also many different options for stocks and bonds, how annuities work, which retirement savings plans are best, and how much you will need to cover your living expenses.
- The average life expectancy is rising
Thanks to improved living conditions and healthcare, we are living to a much older age. Previous generations might have expected to live for 10-15 years after retirement, whereas today it is not unrealistic to expect to live in retirement for 20-30 years. This can be a positive in the sense that we have much more time to enjoy, but only if we have the financial foundation to support a comfortable lifestyle.
- Retirement is the time to do what you want
On the topic of enjoying retirement, it is worth thinking about what you might want to do when you retire. There may be places that you want to visit, hobbies to take up, or you might want to be able to spend quality time with your friends and family. Maybe you’d like to spoil your grandchildren with a trip to Disney Land? In most cases, living a full and busy life costs money. The more you can save now, the more exciting your retirement will be.
- Old age can bring poor health
Part of getting older is a decline in physical health. Older people are at a much higher risk of many diseases, and it can be more difficult to stay active and healthy. It is important to have money that you can use in an emergency situation to pay for health insurance or possibly even an assisted living facility.