Most people, especially the young professionals, don’t really take time and effort to save up for the future. They live each day spending as much as they can, not realizing that they simply can’t do that for the rest of their lives. Others only start planning for their future 10 to 15 years before they retire. While this is still a good time to save up for your retirement, it is always better if you could start earlier. But some who are thinking of having retirement savings are skeptical. For one, they don’t really know where to put their money. After all, the current crisis will surely make investors doubt. But how important is it to have retirement savings?
Before, a retirement savings is not that popular. Since most employers then have pension plans for their employees. But with the current crisis, more and more people are relying on their own personal savings and social security benefits. One of the important benefits of having retirement savings is that you will have the time and money to do what you’ve always wanted to do after you retire. It could be starting a new hobby, going to different places, buy some properties, open up your own business or simply spend time with the family.
Let’s say you are a 50-year old executive who wants to plan for his or her future. You plan to retire by 65 and want to start saving up for your retirement. The next 15 years will see you depositing a great amount of your paycheck to a retirement account. The good thing about retirement plans is that you will see your investment grow through interests as you complete the 15-year plan. By the time your plan matures, you’ll be getting much more than you initially invested.
When you are already 50, you should begin making catch-up contribution. At 62, you’ll be able to get your social security benefits. But should you choose decide to keep it for later, it would be better as a bigger monthly benefits awaits you. Sixty-five is the law-accepted retirement age. By this time, you are already eligible for medicare benefits. Before you even reach 71, you can start taking minimum withdrawals from your retirement account.
The key really is to quit worrying and start planning. If you are afraid of the uncertainties about investing for your retirement, then start figuring out your financial futures. It is probable that you will change your retirement plans once you have gathered all the facts. Despite all that, there are still some who would rather keep their money rather than invest it. The recent economic crisis has put the world financial institutions to a tight spot. While we may never know when things will get better, an alternative would be to spread your investments or asset allocation so that your money is diversified. By doing this, you are also spreading the financial risk. You can choose to invest in bonds or “fixed income investment”, in stocks, or index funds.