Here’s Why You Should Prepare For Your Retirement
Most people don’t prepare for their retirement. They claim that social security and other state-sponsored benefits are enough to support their lives once they’re old enough to retire. while other people hope to continue working in their respective companies until they retire.
They hope that their years of service will be enough to compensate for their retirement funds. However, most financial experts advise against this notion, and they encourage you to prepare for your retirement funds as early as possible. Why? It’s because there’s no guarantee you’ll be working until you retire.
One employee named Phil Ventura planned to have his cozy retirement by working for his chosen company until the age of 60. However, his goals shut down the moment the company where he worked for three decades merged with another firm and left him unemployed at the age of 58-years old.
Now at 71 years old, he realized that younger people should start saving for their retirement as soon as possible. He said that people should stop dreaming and hope that they can continue working until they drop. What happened to Ventura was just one of the reasons why working professionals must prepare for uncertainties and save for their retirement funds as young as possible.
According to a recent survey conducted by the Employee Benefit Research Institute, 79% of workers expect to work even during their retirement years, providing they are still capable to work.
However, aside from unemployment, working professionals may also have to deal with poor, deteriorating health, and unforeseen accidents that forced people to retire early. If you’re still considering your options whether to start planning your retirement funds now or later, consider these things to help you in your decision-making.
The latest research shows that around 55% of working professionals were forced to retire due to various reasons namely:
- A change in the company’s policy.
- Settling down to start a family
- They or their partner developed some health problems.
If you’re one of these working professionals who lost their jobs earlier, ask yourself whether you have a backup job available at hand. Will your future employers still hire you, despite your health problems? What about your skills and productivity?
Can you compete with younger working adults who can work better than you? If not, then it’s time for you to start saving for your retirement while you’re still young and healthy.
At least you wouldn’t be suffering from income loss if you lost your job suddenly. According to the Center for Retirement Research at Boston College, around 60% of people end up retiring involuntarily because they cannot find a replacement job.
Do You Have Enough Savings?
You may be saving now for your retirement funds, but the question is, are you saving properly? Do you think the portion you allocate for savings is enough to support you when life falls back on you? According to the Center for Retirement Research, around 50% of working professionals don’t save efficiently since they still hope to keep working until the age of 60.
The financial experts recommend you to calculate your savings so that it won’t be drained when emergency cases happen. Browse a website like choosetosave.org. To help you determine your financial goals. You only have to input your ideal age to retire and how many years you want to save for your retirement funds. Then the website will show a rundown of how much you need to save per month to achieve your saving target.
Remember to Allocate For Your Healthcare.
Aside from saving for your retirement funds, Anderson also advise his clients to allocate funds for their healthcare. If possible, they should also enlist themselves for Medicare so they won’t end up draining their hard-earned savings when they get sick.
Phil Ventura also experienced paying a hefty amount of $15,000 a year for health coverage for him and his wife when he lost his job. This caused him to dig deeper into his retirement savings without any income returning to them. He even regretted not availing a Medicare when he was still young and able.
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