YOUR CASH COUNTS
Financial Literacy
For Your Future
Getting older is an interesting concept and it demonstrates how people change over time. When you are young, you want to get older and when you get older you covet youth. One thing is for sure, you will get older and you cannot go back. Consequently, planning for when you get older is absolutely necessary. Note that this application does not ask the question of whether you should plan for retirement and old age but when, how much, and how you should begin. Accept the fact that you will get older and most old people will tell you it happens sooner than you think. You don’t want to wake up one day and realize that you are in the Golden Years and don’t have the ability to live the life you have dreamed about.
Application Insights-When Should I Begin Establishing And Funding A Retirement Program? is designed to have you accept the inevitable and begin the planning process now. If you build a good foundation of understanding regarding retirement and start making good funding choices now, not only will you enjoy the Golden Years, but you will avoid a great deal of stress worrying about the future due to lack of action. Begin by envisioning and articulating the kind of lifestyle you want to live after you retire from your full time employment. This dreaming needs to include the age of retirement, where you want to live, recreational goals, “toys” needed to compliment your goals, and all must be discussed and accepted by your spouse or partner if you have one. Specific programs and funding choices beyond social security (if available) need actual dollar amounts so cost out your lifestyle plans. Remember prices usually rise over time so factor inflation into your calculations. A rule of thumb is that you will need approximately eighty percent of your fulltime work income to live a good retirement life and that is if you have very few bills to pay. If your goals are extravagant, you might need more. As you plan your old age future, keep health in the back of your mind. People wear out when they get older and some wear out faster than others. Considering some contingency plans related to possible health issues is a good idea and don’t forget health insurance coverage (supplements) over and above Medicare.
Once you have determined, to the best of your ability, what retirement living will be like for you and others around you, start building the necessary financial portfolio to pay for it. You know you need to accumulate funds, you now know about how much you will need over the span of your retirement life, so now look at possible pension plans, savings, investments, social security, and other government benefits. As you calculate the dollar amounts these various possible sources of income can provide given your contribution levels, remember that you will not need all of the money all at once and there are often tax consequences for many distributions. Determining the cash flow requirements over your retirement life will help you be more accurate regarding what you will need when. For many, depending upon health, you will spend more in your earlier years of retirement. Once you have considered all of the important retirement issues and made your financial calculations, TAKE SOME ACTION NOW! A common mistake that many people make is forgetting that time is your friend when it comes to building financial assets. Even in bad economic times, starting to build for retirement as soon as you have income coming in is absolutely necessary to build the amounts needed with the smallest amount of pain.
One more thing, when spending so much time thinking about getting older, finish the job by getting a baseline health physical, establish a power of attorney, provide a healthcare proxy, write a living will, and any other important legal decisions that are easy and inexpensive to do now that, if not done, can create real problems later. In addition, set up a schedule to review all of your choices and update them as needed.
GETTING OLDER IS A SURE THING
An Application Supplement
One of the most difficult realities for young people to understand and accept is aging. Old is a relative concept after all and being seventy is right next to ancient for a twenty plus year old. Add to this the notion that I may not reach old age and I have so much on my financial plate now and it is no surprise that planning for retirement is often the last thing on young people’s mind. NEWS FLASH: getting older is a sure thing for almost everyone and retirement can be the “golden years” if financial matters are solid or the “tarnished years” if assets are limited.
Understanding the demands of old age and retirement and the planning that is known to be necessary is critical for living the good life as a senior. By the way, futurists are projecting that today’s young Generation X and Y people will have a more difficult time being successful retirement planners than the baby boomers of today. Yes, successful retirement planning is difficult and getting harder. Getting started on the right track early is the only way to mitigate this condition. Before your roadmap to enjoyable retirement is given to you, keep these facts in mind:
Much research has been done to identify the appropriate behaviors in planning for retirement. Almost all experts agree that young people that do these things will be well off in their golden years. The list is not difficult to understand or remember. The difficulty is to commit to follow the map offered by the United States Department of Labor: http://www.dol.gov/ebsa/publications/10_ways_to_prepare.html
Commit:
Remember: Most young people will put off following these guidelines or forget them altogether. DON’T BE ONE OF THESE TARNISHED SENIORS!