Planning For Early Retirement
When you’re young and just about to embark on that new job, the last thing to cross your mind at that juncture would be retirement and anything to do with it.
At this stage in your life, you’re probably wondering how to climb up the corporate ladder and make it big and “why should I save money for retirement” is the going to be the last question you would ask yourself.
Saving can be a daunting task for many people but when you’re young, you have ample time by your side and that’s an asset worth having.
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There are several benefits of saving for retirement and the importance of saving for retirement early can’t be understated.
Simply put, by acting in the present and preparing retirement, you will end up in a much better place in the future than if you choose to procrastinate.
Why Plan For Early Retirement?
Eventually, a time will come when you will have to hang it all up and end your career and when that invariably happens, you need money to spend so that you can relax and unwind during those golden years of your life.
Unless you plan on working after retirement, you will be in need of money for even running the day to day activities.
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A lot of people wonder if it’s too late to start saving up for retirement but let me tell you; when it comes to retirement planning, it’s never too early to start saving. All that matters is that you get started today.
The key to saving money when planning retirement is, by spending less than you earn and investing the difference into various saving plans or investment schemes.
When you are able to successfully accomplish this early in your life, you will be able to reap benefits later when you’re actually in need.
It really doesn’t matter if you have limited knowledge on where to invest or whether you have little funds; what matters is taking that first step towards investing which is bound to make an impact in your future financial situation.
Today, in this article I am going to shed some light on why there’s no better time than today to start investing for your retirement and highlight 5 top reasons to save for retirement early.
5 Reasons To Start Saving For Retirement NOW!
#1. Financial Independence
Unless you have a sugar daddy, a big inheritance, stacks of money in your trust fund or intend on winning a lottery, no one else is there to look out for you.
The responsibility to earn and save money lies solely with you alone and it becomes all the more imperative if you intend not to work after retirement.
You really need to save early and often right now and take advantage of the time that’s on your side so that you aren’t a burden to anyone in your twilight years.
You don’t just owe this to yourself, but also to your family because no one else is going to do it for you. Trust me; the last thing you want in retirement is to run out of money.
#2. Compounding Interest
Compounding Interest is a simple enough concept and possibly one of the best reasons to save money for retirement.
In simple words, when the money you have invested in a plan starts making money which continues to build and compound over time, well you have a lot of money to deal with in the future.
Let me illustrate this with a simple example: If you intend on start saving when you’re in your 30’s and wonder how much do I need to retire at 65 and your overall goal is $250,000, you would need to keep aside $1,175 a year based on the assumption that the annual return is 6%. However, if you wait it out till say you’re 45; your yearly contribution nearly triples to $3,525.
Make the best use of compounding when you have the time by contributing to a retirements fund to ensure that the money you save today is more powerful than the money you save tomorrow.
Money Chimp’s compounding interest calculator can help you estimate compound interest and give your more clarity with its various permutations and combinations.
#3. Tax Benefits
There are several tax-advantaged ways to save for retirement. When you invest your money in various investment and pension schemes you lower your taxable income by claiming deduction up to the maximum eligible limit.
Not only that, you also get to earn interest by investing in these schemes thus helping your money grow as well. Moreover, post retirement your gratuity and pension investments are also tax-free up to a certain limit.
#4. Free Resource Material
In today’s day and age with technology and information available right at your fingertips, there’s no reason why you shouldn’t be able to find sources and information for investing your funds.
There’s tons of material on the internet readily available which provides all the information you need to know on where to invest your money and allocate your assets efficiently.
There is a wide array of safe and inexpensive investment options available which lets you choose which plans works best for you.
Check out AARP retirement solutions which will hand out sound financial advice on how to invest your funds diligently and efficiently.
#5. Early Retirement Health Benefits
Saving for retirement can also help to ensure that you are well cared for. Your health can take a turn for the worse at any time but you need to be doubly careful especially when you have reached old age where you’re more vulnerable and susceptible to diseases and unforeseen medical emergencies.
You need to have some emergency money at least if you want to tackle these health issues head on.
Another reason why you should start saving for retirement work, as you cannot possibly expect to keep working and generate income for yourself forever.
What Are You Doing To Save For Retirement?
The amount of money you set aside for retirement purposes will have far fetching consequences on how your life pans out in the end.
A lot of people pose questions like how much do I need to retire at 65 after having not invested at all. Simply put, one can’t seek to retire at 60 or even 65 if preventive measures aren’t taken when you’re young and able.
This simple calculator will give you an insight on the number of days until retirement and the approximate number of workdays left by inputting basic information like your birth date and the age you wish to retire on.
Another way to determine whether your current retirement savings are sufficient enough is by using the saving for retirement calculator.
All your burning questions concerning your retirement age like why save for retirement now or how much money do I need to retire at age 60 will be answered with the help of this calculator.
With the assistance of this ingenious retirement calculator, you can easily calculate retirement age and be able to figure if you are doing enough today to meet your retirement objectives.
Moreover, it will also help determine if at all your money runs out during retirement, how much additional savings would be required for self-sustenance.
Final Thoughts
An early retirement is the catalyst you need to live life to the fullest. If you have all the time in the world along with plenty of money to boot, the possibilities are endless to live life free from all worries.
Moreover, it lets you be free from stress which is one of the major causes for degradation of health.
Instead of toiling away at work, you could be resting at a good retirement village or exotic retirement bungalows while enrolling for exercise programs to ensure you stay fit and healthy.
You could even embark on that nature trail or marathon which you never had time for before, owing to early retirement.
When you’re in your 20’s or 30’s, all these might sound trivial and might not hold much importance but when you’re slowly approaching the ripe old years of your life, work will be the last thing on your mind and when you have money or working for it, a gamut of opportunities come your way.
Don’t procrastinate for too long; by pushing off your retirement date, you’re just hurting your chances to live out your life comfortably later.
Catching up later can be an extremely difficult task as illustrated before so start saving for retirement right now; it doesn’t really matter how old you are.
Start doing your bit now, even if it’s just a small amount to start off. Don’t unnecessarily put pressure on your future self with crippling amounts of retirement savings or employment until the very end of your life.
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