Before you even begin thinking about how to start your retirement planning, it’s important that you understand why retirement planning is so important to your future (and your loved ones future). While this may seem trivial to you at first, surprisingly the key components of planning for retirement run contrary to popular belief. Furthermore, proper implementation of all the key components of retirement planning is essential if you want to guarantee yourself a financially secure future post retirement.
Today we’re going to take a look at why it’s crucial that you plan for retirement and do so correctly.
- Pension & Social Security Benefits Uncertainty: Let’s be honest – the prospects of government-sponsored retirement aren’t very good. Our world’s population continues to age and with this there are fewer working-age people who remain out there able to contribute to the current social security system. A similar thing is happening with pension systems. There’s a great burden being placed on these systems as more and more people retire but live longer lives due to advances in health care.
- Unexpected Medical Expenses: While the social security system and pension system failures may not occur, you still shouldn’t plan your retirement on funds out of your control. Plus, even with that risk set aside, social security benefits will never be enough to provide you with a financially adequate future post retirement. If you don’t have your own savings to add to the mix, you’ll find it nearly impossible to enjoy much past the minimum living standard that the social security system provides. With old age comes medical problems and increased healthcare costs. If you don’t have your own nest egg, then it may be too much of a burden for you to bear if you have to cover unforeseen medical expenses.