Today we are going to talk about the importance of saving for retirement. Don’t worry, it is never too late to start saving for your retirement and the tips we are going to cover will help you feel better. The reality is we are all living longer. The tradition of retiring at 65 on a pension was fine when people lived to be 70 but with people living into their 80s and in some cases 90s, we have to change the way we approach retirement.
Importance of Getting Out of Debt Quickly
There are baby boomers who retired and are still in debt which is a situation you don’t want to face. One of the ways you can lead a comfortable life before you retire and during your retirement is to get out of debt as soon as possible. The less debt you have the less money you will need to live because there are no obligations that are consuming that income.
As a goal, you should try to live on half of what you are making during your working life. While that may sound frightening if your home is paid off and you have no debts to pay then most people can live comfortably on half their income. So if you made $60,000 per year you’d want to have $30,000 per year during your retirement which may sound like a large amount to save but if you begin investing early you can reap the rewards of asset appreciation and compounding interest.
Do not rely on the government which may provide subsistence income but won’t give you enough to cover your costs of living during retirement. As individuals, we need to take responsibility for our well-being and that includes planning for retirement. There are many ways to save for retirement but the biggest step is to actually start, when you do will feel empowered knowing you are in control of your financial future.