Recent surveys have shown that almost 50% of people between the ages of 55 and 66 don’t have any money saved up for retirement. Many of these people didn’t take the time to plan for retirement in advance—and it’s coming back to bite them in a big way.
If you want to avoid finding yourself in this scenario, planning for retirement early will be of the utmost importance. It’s never too soon to start planning for retirement.
Today, we’re going to discuss some of the top reasons to begin planning for retirement early. We’re also going to touch on how to plan for retirement so that you can get things moving in the right direction when it comes to putting retirement plans into place.
Check out ten reasons why planning for retirement early is key below.
1. Allows You to Save Up More Money for Retirement
When you first start working a full-time job, you might not be all that concerned about planning for retirement early. The only thing you’ll be worried about is holding onto your job and making advancements in your career.
But if possible, you should try to begin saving for retirement the second that you start working. It’ll make it possible for you to save up way more money over the long run.
Even if you aren’t setting a large portion of each of your checks aside for retirement, the littlest bit will help. Over the years, even a little bit of money will add up fast and leave you with more than enough money for retirement.
You’ll come to enjoy checking out your retirement account every so often to see how it’s doing. It’ll help you establish good financial habits early on in life and keep those habits in place for the long haul.
2. Gives Your Money More Time to Grow
As you start saving for retirement, you shouldn’t just stash your money away in a savings account. Most savings accounts are going to come with very (very!) low-interest rates, so you aren’t going to see your money grow much at all.
Instead, you should search for financial advisors for you and your retirement money. A good financial advisor will be able to help you invest your money in stocks, bonds, mutual funds, and more.
By doing this, a financial advisor will be able to take your money and help it to multiply very fast. Compound interest is going to allow you to build quite the nest egg if you play your cards right.
You might even find yourself playing around with an early retirement calculator by the time you’re in your 30s. You could very well figure out a way to retire way sooner than other people.
3. Puts You in a Position to Take More Investment Risks
If you wait until you’re in your 40s, 50s, or even 60s to start saving for retirement, you’re going to have to be safe with your investments. You won’t be able to take too many risks since they could backfire on you and put you behind the 8-ball when it comes to savings.
But when you start planning for retirement early, the opposite will be true. You’ll be able to take some calculated risks when you invest your money since you’ll have time on your side.
And who knows? Some of the risks that you take could really pay off for you in the end. They could have you rolling around in the dough when everything is all said and done.
4. Provides You With Access to Tax Benefits
Some people are under the impression that setting aside a whole lot of money for retirement could hurt them come tax time. But in reality, most people can actually save money by saving for retirement rather than holding onto their money.
You should be able to reduce your tax bill by saving for retirement. Every dollar that you save as part of your retirement fund will bring your tax bill down a little bit and put you into a much better financial position each April 15th.
You obviously won’t be able to get out of paying taxes entirely. You are still going to be in charge of taking care of some of your tax-related responsibilities.
But you might be surprised to see just how much you can save on your taxes by planning for retirement early. You could save thousands of dollars over time thanks to all your retirement savings.
5. Reduces Your Retirement-Related Stress
Retiring from work should be something that you’re looking forward to throughout your life. It should not be a source of stress.
And yet, it’s not all that uncommon for people to start to feel stressed out when the topic of retirement comes up. This is large because so many people know they aren’t going to be able to retire comfortably at any point.
Most experts say that the average person will need somewhere in the neighborhood of $2 million to carry them through retirement. That can be a very scary number for those people who haven’t set aside a dime for retirement.
If you’re already getting stressed out by the mere thought of retiring, you can reverse this trend of planning for retirement early. You have enough things to worry about and stress out over as is. The last thing you need is for retirement to weigh on you as well.
6. Gets You and Your Spouse Excited for Retirement
If you’re married, you shouldn’t be the only one planning for retirement early. You should also get your spouse in on the action and encourage them to start setting aside money for retirement, too.
When you do this, it’ll give you both an opportunity to begin to get excited about retirement. Even if you still have a few decades to go before you can call it quits, you can start to talk about retirement and everything that you’d like to do when you retire now.
There are almost 200 countries in the world, and you may want to try to visit as many of them as you can when you retire. But you don’t have to actually wait until retirement to start planning out which ones you want to see.
As long as you and your spouse are planning for retirement early, you can start putting some plans into place now. It’ll help you build up the anticipation surrounding retirement and guarantee that you and your spouse are all ready to go once you retire.
7. Ensures Your Retirement Money Will Last for a Long Time
The biggest fear that many people have when it comes to retirement is running out of money at some point. This is something that might keep you up at night if you’re in your 50s or 60s and don’t have a ton of money in your retirement fund.
As we alluded to earlier, most people are going to need to have a couple of million dollars set aside. Otherwise, those who are already retired might be forced to go back to work to make ends meet during the later years of their life.
You aren’t going to need to be concerned about finding yourself in this position when you start saving for retirement early. Your money will last and last (and last!) when it’s been given more than enough time to grow.
You’ll sleep a lot better at night in your 40s and 50s (and in your 60s, 70s, and 80s, too!) when your nest egg is overflowing with money. It’ll be such a big weight lifted off your shoulders.
8. Prevents You From Having to Rely on Your Kids in Retirement
Let’s say that you don’t start planning for retirement early, and as a result, you end up either not being able to retire or you retire and then run low on funds at some point. Then what?
Well, if you have kids, then you’re going to have to rely on them to take care of you to some degree. They might have to lend you money when you need it, invite you to live in their home, or even support you financially at all times to keep you afloat.
This isn’t what most people want. Although it’s nice to have kids who can support you financially when you need it, you don’t want to spend your golden years feeling like a burden to your kids.
You can avoid putting yourself in this spot by planning for retirement early. You’ll be able to enjoy better relationships with your kids and your grandkids when you don’t always have to ask them for financial assistance.
9. Enables You to Be More Charitable in Retirement
Wouldn’t it be nice if you could do some good for the world during your golden years? It would be pretty much the perfect way to end life for a whole lot of people out there.
But unfortunately, not everyone gets the chance to make the world a better place during the later years of their lives. They simply don’t have the money that it would take to make any real difference in the world.
If you’ve decided that you would like to spend your retirement being charitable towards others, you’ll need to start planning for it today by planning for retirement early. It’ll be the only way to ensure that you have enough money to spare when you retire.
You will be able to give your money away freely in retirement when you know that your nest egg is on the larger side. You’ll also be able to leave some money for your kids and grandkids one day so that they can continue to do some good with it on your behalf.
10. Lets You Teach Others About Planning for Retirement Early
When you plan for retirement early, you should start to see the benefits of doing it within just a few years. You’ll be amazed to see how fast your money will grow when you set it aside and don’t touch it.
You’ll also be inspired to share this “secret” with others. You’ll want to talk to your kids, your other family members, your friends, etc. about how you started saving for retirement early and saw what a big difference it made in your financial situation.
Doing this will make you feel good about yourself. But more importantly, it could potentially help you change your whole family tree and the trajectory of your family’s future.
Once those around you see how saving for retirement early is benefitting you, they’ll be way more likely to follow your lead. This could put them into the same financial position you’re in and give them a much brighter future.
At the end of the day, it makes all the sense in the world for people to begin planning for retirement early. It’ll help both them and those around them when they have the best plans for retirement set up.
Planning for Retirement Early Will Benefit Your Life in So Many Ways
Far too often, people put off retirement planning because they can’t wrap their heads around the fact that they’re going to retire one day. Retirement seems so far off, so they can’t be bothered with it.
But as you’ve seen here, planning for retirement early can be very beneficial for you. You’ll be able to save so much more money if you start saving now as opposed to putting it off over and over again.
Would you like to get access to more personal finance tips that will work wonders for your retirement account? Look for them in the other articles on our blog.
