Posts Tagged ‘planning for retirement’
It’s Never Too Early To Start Thinking About Retirement
If we wait until we are about to retire before we think about researching financial options for retirement, then it is probably too late. Not “too late” as in there is no point doing it, but too late in that we will then be too late to capitalize on the opportunities presented by some investment options, especially if you plan on retiring on investment property. There are so many around as well, so many that it is probably best if young people start getting at least familiar with some of the choices available to them.
Young people are so busy living their busy lives that they barely notice they are getting older every day. Older people are busy finally having a bit of freedom now that the kids have moved out, and retirees are already there. So you can see that the need for people of all ages to get real about retirement is there. Financially, we should all know what is at our disposal – but what about 5, 10 or even 20 or more years from now? Do you know what will happen if you suddenly are unable to work? What if the company you work for goes bust, or a natural disaster flattens your business and insurance does not cover it?
It really is in your best interests to find out what you can about your retirement options now, no matter what your current age. If you start now, you will know more when you need to. It is an easy online job for teenagers to find out about financial matters and research the ins and outs of different options. It may not be as interesting as Facebook to them, but discovering the pros and cons of fixed annuities is a wonderful way to build your knowledge – and who knows, it may even save you some money in the not too distant future!
Your Wealth is More Than Your Retirement Account
The stock market industry is on fire (with marketing.) You can’t go 5 minutes without hearing about how the DOW did today or which stock Jim Cramer is picking (and then not picking, and then picking again.) Stocks are definitely the sexiest of the standard investments, but your whole wealth picture should be focused on when you make your planning. Here are some areas that aren’t often thought about as much or counted too much on.
Your Home
Property investments are an important asset class. Property is easily leveraged by the normal person (your mortgage) so that you can make good gains of very little initial investment. Generally there are not large losses in property and the price increases outpace wages by a little bit. The part where people get into trouble is they count their home as wealth. True it does hold value, but do you really intend on selling it and downsizing in your older years? The home as personal feelings attached to it unlike your investments in 3M so really understand if your home is comfort or wealth upfront.
Your Business
Running your own business, even a small one, can really boost your retirement years. Most of us need to save up $24,000 in cash to pay ourselves $100 a month from in retirement (without eating the principal.) Even a hobby business that you enjoy doing can produce more than $100 a month selling on eBay or to friends. It’s worth consideration to reduce your final investment needs or even just some extra spending money. Also, a business can often be sold for a lump sum of cash.
Social Security
The younger you are the less I would consider social security as part of your retirement income. If you are further along your road to retiring though this can clear a large part of the gap in your savings. If your younger than 30 I would just consider it a nice bonus if you get it.