If you’re in your 20s and have just started earning, then saving up for retirement must not be your topmost priority. That’s understandable too, as one may want to live their 20s carefree and to the fullest without worrying about the future.
However, planning for your retirement when you are young isn’t wrong, besides it is encouraged to do so.
There are several reasons to start saving for retirement early on in your career, let’s have a look at a few of them.
1. To Retire Early
Why wait till you are 60 or 65 to retire when you can do it at 40 or even in your late 30s? Suppose you start working at 25 and want to retire at 40, that gives you 15 years to save and invest. Regardless of your income, saving and investing for 15 years is sufficient time to build a strong retirement fund to live a comfortable life.
Understand, it is not a piece of cake. But with regular savings, smart investments and proper planning, you can retire early. Go through the posts at Retire In Style which will help you with retirement investing, strategies and more.
2. To Have More Money
The earlier you save, the more money you’ll have during retirement. I mean think about it, if you start saving at 35, you’ll save more than a person who started saving at 40, considering both retire at the same time. Because you started early, you’ll have an extra 5 years for generating extra savings.
Also, you can save more at the start of your career compared to when you’re in the finishing line of your career. Considering you don’t have any huge monetary responsibilities, like children’s school fee, mortgage, student loan and so on.
3. To Not Be Dependent
It’s not fair to completely depend on your children for your financial needs after retirement. While they may happily oblige to look after you, it may put a financial strain on them. This makes you a burden in their life, and it isn’t something you’d want.
Also, it’s risky to depend on pension and social security to fulfil all your needs in retirement. That’s why save enough to live a financially independent life without being a burden on someone’s bank account.
4. To Live A Healthy And Stable Life
The average life expectancy is on the rise, owing to advanced medical treatments, medicines and healthcare policies. A longer life demands more retirement funds to meet all your unexpected needs which will last through your entire lifespan.
This means you need to plan for a longer time period and save more. It is accomplished by saving early as it gives you a chance to save more and for a long time. Also, it is better to have more than required funds than to have insufficient balance and face problems during retirement.
5. To Check Off Your Bucket List
Everyone has a bucket list to complete. Places to explore, things to do, adventures to experience and foods to eat. If you save early, you save more. Then you can retire with enough funds in your account to check off things from your bucket list.
Responsibilities of life and career get in the way of accomplishing your dreams and travelling often. But if you save early and invest smartly, you can travel, explore and live life to the fullest.
6. To Contribute More
Again, by saving early, you save more. This not only allows you to invest in your dreams but also lets you contribute more towards society and your family. It’s nice to leave something behind for your children, parents or people who have looked after you during your lifetime.
Now that you know the benefits of saving young, start working on a smart retirement plan to reap its benefits early.
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