Retirement Planning: 5 Good Reasons to Save for Your Golden Years
Retirement may seem a long way off to you, and you might not be worried about it at this time. However, there are many benefits to being prepared – and many disadvantages to not being prepared – regardless of what age you plan to retire.
Start planning now by learning about your expected retirement costs. Remember, also, to add expenses for cost of living increases in the future. The way of the world is that costs invariably go up, not down, so be sure to include these increased costs in your calculations.
It’s more important than ever to start saving early for your Golden Years!
Consider these points:
1. The earlier you start saving, the more money you accumulate in interest. Plus, you can put away much less each month if you make a habit of putting money away in savings early.
· For example, if you put away $50 each week for 30 years at 10% compounded interest, you’ll contribute a total of $78,000 over those 30 years. You’ll earn over $371,000 in interest during that same time! Why forego hundreds of thousands of dollars in free money? Let your money work for you!
2. You most likely want to avoid being a burden to your family. By saving over the years, you’ll have the money you need to support yourself once your work income stops.
· If you need assistance with your retirement planning, it’s wise to hire a professional to assist you with savings and investments that will meet your retirement needs.
3. Government Pensions may not be enough. CPP and OAS payments are a lot lower than what you’re used to living on. In addition, whether by choice or not, you might find yourself retired long before your CPP and OAS benefits even start! Understanding what your government pension and benefits can be worth when you retire is imperative.
· From time to time, the Service Canada mails you a statement showing your expected benefits. You can also find your benefit amounts on their website. Pay attention to their projections and stay informed about legislation that can affect your benefits.
· You’ll notice that your CPP and OAS benefits also go up the longer you can delay starting your payments. So having the funds to cover a gap between when you retire and when your CPP and OAS benefits start will come in handy.
4. Provincial health care doesn’t pay for all your health expenses. It’s smart to have money to cover the extra expenses or invest in other healthcare options. Health concerns plague most retirees, and adequate healthcare is expensive.
· Also, provincial health doesn’t cover all long-term nursing care. With most people living longer, long-term nursing care is becoming a necessity for many.
5. What do you desire for your retirement? Do you like to travel? Travel is expensive. Do you have hobbies like golf? Golfing has ongoing costs. Do you want to leave an inheritance for your children, grandchildren, or a favorite charity? If so, you’ll want to give these funds time to accumulate.
Your Golden Years can be the best time of your life. Plan for retirement wisely to ensure you have the money you desire in order to do what you want. And the best way to accumulate that money with less effort on your part is to start now – while you’re still young.