Retirement will happen to all of us if we make it that far! There are many people that will never “retire” so to speak, because they think by doing so, they might die if they stopped working. However, working past 65 is fine, but financially, we should be prepared to start collecting some money at that age. People work their whole lives with short vacations here and there and then when they retire, they never travel and do things they may have always wanted to do. This is the opposite of how it should be! The main hindrances are money and health. We shall focus on money in this article and give some tips on how to make sure retirement is refreshing.
1) Plan early! I personally use Vanguard to plan out exactly how much I need to retire at age 65 and depending on how much I deposit into an account, will result in how much, per month I will receive. Vanguard has a very simple calculator tool to help you do this, as do many other sites. For example, if you are 25, and have $0 in the savings and begin saving $200/month, by the time you are 65, you will have $236,392, which allows you to withdraw $788/month. I like simple equations and using a calculator online with an investing company can help you to see reality. Many people retire in a tight bind and that is not the purpose of retirement.
2) Don’t count on social security! Before you close my article, hear me out. I believe we will have social security in 50 years because if we did not, we would have mass chaos in our country and that is not what we want. However, I plan like we will not have it and then when we do, that will all be extra money! If I budget my paycheck to be $500/week and I make $700/week, I have $200/week extra. Imagine if you do not include $1000/month social security and setup an investment and by the time you retire, you earn $788/month and then get an extra $1000 from social security? You will be one happy person! If you count on something and it is not there, you’re in trouble. If you don’t count on it and it shows up, you’re “in the money.”
3) Have money taken out of your check! We do not need every dollar from our check. The less we see, the less we spend! I am very tight every month, but that is because I have money taken out of my check and my savings and investments are building. I would rather be tight now than at 65 when I don’t have a s much energy to do something about it. The less you see, the less you spend!
There are many purposes of retirement, one of which is to not work as hard and enjoy life! Let’s face it: when you get to retirement, your at the last stages of life. You may live another 30 years, but you are in the last stage of life and you want to enjoy it and not have to be burdened down with money. Financial planning for retirement starts yesterday and for those that have kids, I would encourage it as a young person. Happy retirement!