It can be difficult to determine exactly how much you will need in order to retire comfortably. For many young people retirement seems to be a long way off. It can seem to be too much of a hassle to figure out how much to put into retirement and the best way to save towards it. Since many people are confused by all of the options that are available to them, they use this as an excuse to put retirement planning off until a later time. Here are five reasons to begin planning now.
1) If you start saving for retirement at a young age, it means that you will need to save less money in the long run, because your money begins to work for you, at a quicker rate. Interest will be adding on to the money that you are already saving, so you will have more money than someone who saves the same amount, but starts at a later time.
2) Unfortunately many companies have begun to do away with pension funds, and other retirement accounts. You will want to have control over the money that you have saved for retirement. You should plan to be able to live off the amount that you have saved. Social Security is not as sure for the younger generation, as it is for the older generation.
3) As life expectancy grows, so does the amount you will need to have to retire on. The best way to plan for an unexpected amount of time is to have enough money saved up, so that you can live off the interest of your nest egg only. You will need to determine the amount that you would like to have to live on, and then save a nest egg that will generate that amount of income.
4) As healthcare improves many people are staying much more active in their retirement years. Many people plan to travel once they retire. In order to follow your retirement dreams, you will need to have enough money to finance them. You should begin planning and saving now. These dreams may help you find the motivation to save more money.
5) Inflation will affect the amount you need to retire on. While twenty five thousand dollars a year may seem adequate to you now, you may actually want to save more to cover the cost of inflation. Prices have risen a lot over the last fifty years, and you need to have enough saved that it will not adversely affect you.