Despite one day of hoping to stop working, many Americans have not started a retirement financial plan before working for many years. Due to the high cost of living, it is important that people start making money for their lives as soon as they have finished their work. A recent study shows that about four-fifths of full-time employees can use a company-sponsored 401k or similar investment strategy. On the other hand, more than 40% of Americans do not have pensions or long-term savings. Regardless of your preservation method, you should start with many aspects today.
You will live longer
In 1950, when many baby boomers were born, the average life expectancy of Americans was just over 68 years old. As of 2010, this number has increased to 78.7 years. So what does life expectancy have to do with retirement financial planning? The longer you live, the more money you need to survive. In 1950, if you retire at the age of 50, on average you need enough savings to live another 20 years. Today you need enough savings for about thirty years.
Not enough social security
Americans receiving social security earn an average annual income of about $16,000, or about $1,250 a month. For most Americans, this is not enough to make them live comfortably. In addition, you will not receive social security benefits until you reach the age of 62. This means that if you retire early, you will have to rely entirely on your personal savings, 401k or pension.
Retirees face higher health care costs
In addition to regular payments such as mortgage payments, groceries, insurance and entertainment, retirees are also facing increasing health care costs. In addition to health insurance premiums, a pair of American retirement ages, such as 65, can pay an average of nearly $600 per month for routine medical procedures, inspections, and medication costs. At the age of 75, the monthly fee will exceed $700.
Retirement should be enjoyable
So far, we have discussed all the negative factors associated with not having a proper retirement financial plan. Now let's see what you can do with a security plan. As mentioned above, people's lives are longer than ever. This, without work, means a lot of time for leisure activities. If your financial security is safe, this could mean regular visits to relatives outside the city, vacations across the country and around the world, and even regular indulging in high-end restaurants.
In short, a retirement financial plan is a necessary condition for healthy, stress-free and timely retirement. The sooner you store, the less you worry about in your later years.
Orignal From: Why retirement financial planning is essential
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