What You Should Know About Retirement – Even If You Never Plan to Retire

RetirementRetirement often seems either far, far away or right around the corner — depending on how close to retirement you are. So the most important things you need to know about about retirement may not be what you’d imagine.

But they’re really very simple:

  1. Retirement should be on your radar today — even if you never plan to retire
  2. And NOW is the time to start saving for retirement, if you haven’t already started

Why are the two items above the most important things you need to know about retirement? (Assuming you’re not already retired, of course.)

Planning for retirement

First, it’s common for people to want to avoid retirement, period. That’s because many people visualize retirement as sitting around the house staring at the TV, bored out of their skulls. Naturally that doesn’t sound very appealing. (Although it doesn’t have to be that way.) It’s also common for people to figure that they’ll never be able to retire, even if they want to.

In both cases, “Oh, I’ll just work forever” is the common refrain.

But sometimes, you can’t work forever — through no fault of your own. You may be laid off late in life and unable to find another job, or you could become physically unable to work. (According to the Social Security Disability Planner , a 20-year-old worker has a 3-in-10 chance of becoming disabled before they’re old enough to retire.)

On a more positive note, you might also change your mind on how you feel about retirement. Maybe you’ll be 75 and have the urge to go out and do things you’ve never done before.

In either case, you don’t want to be broke and depending on the kindness of strangers (or maybe the government) if that happens. You want to have options. Choices. The funds to control your own life.

Life never goes as planned, but money can sure help smooth out some of the bumps.

Why NOW is the best time to start saving if you’re young

If you’re young, now’s the best time to start saving for retirement for the simple reason that the sooner you start, the bigger an impact your savings and investments are likely to have. In other words, time is on your side.

Set aside a portion of your income from here on out, save and invest it wisely, and you’ll likely be in great shape when it comes time to retire.

And it won’t take a lot of money to do so. For example, if you’re age 20 now, for the price of a couple of nice dinners out (say $100 per month) you could end up with half a million dollars in a Roth account by the time you turn 65 (assuming an 8% rate of return). Of course, you could contribute more than that too.

So don’t delay because it seems far away. Time really does go faster and faster as you age, and retirement time will be upon you before you know it. You want to be able to retire if you feel like it or need to.

Why NOW is also the second-best time to start saving

Even if you’re not so young, now is where you’re at. You can’t go back and change the past, but you can still have a positive impact on your future by setting aside money for retirement now. Plus, the longer you delay, the more you’ll have to set aside to ensure an adequately funded retirement. Remember though that ANY amount you can contribute will benefit you.

While you might have less time to invest than a 20 year old probably would, you can probably also afford to set aside a larger portion of your income. And if you’re over age 50, you can also take advantage of catch-up contributions — which allow you to contribute a larger amount to your 401k and IRA plans. It’s not too late. (Here’s information on the IRA contribution limits, if you’re curious.)

As the Chinese proverb goes, “The best time to plant a tree was twenty years ago. The second best time is now.”

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