The merits of these are debatable (if you didn’t know they exist, what good are they doing?). One thing is certain, we need help in these areas. Survey after survey indicates that Americans aren’t saving enough for retirement.
How can we realize this enough to answer the survey but not enough to do anything about it?
Retirement is “over there”. It’s somewhere off in the distance. Is it 59 1/2 or 65 years old? Who knows.
It’s difficult to commit to saving money now for an ambiguous concept down the road. Humans are fantastic are registering immediate responses. Just see how long you can keep your hand on a hot stove. But we’re not so great at delayed gratification, which really is what planning for retirement is about. How well do you want to live after you stop working?
Here’s the trick: as you begin planning your retirement, it becomes less abstract. You start realizing how much you could save and what that means for your standard of living. Once you have the numbers, you start dreaming about the vacations you want to take and items to cross off your bucket list.
Unfortunately being abstract isn’t the only roadblock to retirement. There are lots of ambiguous terms like 401(k), Roth IRA, Mutual Funds, Bonds, Compound Interest, Taxes. That is a lot going on. There are different vehicles for your plan as well as a variety of ways to fund them.
It is important to balance two sides of the same coin. One, understand that you don’t have to know it all. Meet with a fee-only financial planner and investment advisor that has access to more information than you. In the multitude of council, there is safety. Two, don’t invest in anything that you don’t understand. Identify professionals that have the heart of a teacher that are willing to coach you into understanding your options. You don’t have to know it all to begin with, but this is your retirement. You need to know what you are doing when you begin putting your money into something.
You don’t want to work your whole life. Or, at the very least, you don’t want to have to work your whole life. Do you want to travel? Do you want to leave your family an inheritance? Do you want to donate money to charities and worthy causes you believe in?
Whatever your personal drive, find the motivation to start your retirement planning now.
(This is the latest post from Upperline Financial Planning intern Trevor Acy