Everyone knows it’s not easy to save money! But in the bottom of our hearts, we also know that regular savings is the only way to secure our financial future! Short of inheriting a windfall from a long lost aunt or winning a lottery, saving regularly is the only way to feel confidant about what our future has in store for us.
This is a list of Four top reasons to save (as much as we could!)
1. You may not be able to work as long as you expected. Your health may spring up surprises. People do leave the workforce earlier than planned. And once you leave workforce because of failing health, it’s nearly impossible to regain health to join the workforce. Always plan for emergencies by taking appropriate insurance for health, life, etc.
2. Pensions. With employer pensions the exception rather than the rule, there is nothing to depend on in your golden years. Fewer and fewer employers are using the pension as a recruiting tool. Also Social Security may not be able to pay its full benefits after a couple of decades. You really need to reduce the expected income from Social Security in retirement, to be on the safe side.
3. You don’t want to be dependent on your children in your later years. You want them to be independent and living a successful life not in your life supporting you financially. The joy of visiting your grandkids is much higher when you are independently supporting yourself. Financial difficulty anywhere within family always creates tensions and sucks out the joy of living.
4. You don’t wan to shrimp on necessities like food, heat, electricity and clothes later in life. You will need a plan to completely secure that. Although the discretionary expenses can be reduced if the market tanks and you need to readjust, your fixed expenses will not vary by much.
For young people in their twenties today, retirement will not be a destination. With all the medical advances they can easily expect to live past 100. Three or more decades of expenses is not a small amount and a good plan would be needed to achieve that.