Is this you?
Unfortunately, there are far too many people who do not expect to retire.
They figure they will die early or the government will take care of them or their kids will take them in or they will inherit a windfall.
But, did you know that retirement preparation is not just about you?
It is also about your heirs and loved ones.
Think about it. Especially if you are a Millennial.
You know how much you are struggling right now to try to be independent and get ahead in this world. That is why I started my business- to help you cut the learning curve (and hopefully I am helping in some small way).
Now imagine trying to support your aging parent(s).
Do you want to do that to your children?
Worst case scenario, you do die young. Now you have something to leave your heirs. See my post last week about the importance of having your estate in order, even if it does not seem like much.
But, what if you live a long, healthy, active life? Do you want to be hobbled by not having enough money and resources to enjoy it?
Best of all, it is much easier to start preparing for retirement when you are young. You can start as soon as you are born (so start investing on behalf of your children and teach them how to invest when they are old enough to start to understand). Or, you can start wherever you are now and be that much further ahead when you are older.
How much do you need to save? That depends on the lifestyle you want to have. Figure out how much you would need to live that lifestyle now and use an online calculator to determine what the future value of that amount will be.
The current average inflation rate from 1970 to 2020 is 3.88%, so plan to double that amount every 20 years (for example, if you need $40,000 today and have 40 years until retirement plan to have enough invested to be able to draw down at least $120,000 each year in the first few years of retirement). You will then need to multiply that amount by how many years you expect to live as a fun loving, independent retired person. Then divide that total by how many years you have until retirement to figure out how much you need to save each year.
And, remember, your retirement funds are not just in your government-recognized accounts like a 401(K) or IRA. They are also your savings, other investments, house, rental properties, and any other assets you own.
What are your retirement plans?