Everyone wants to retire comfortably, with more than enough to sustain a nice lifestyle and pay for the medical bills which may come the way before one bids adieu. Yet, for many, it is like a long way off especially for those who have just entered the workforce. You know it is at the end of the working journey but you’ve just begun – so why worry or think about it? Yet for others, the day of retirement inches ever closer and yet, it seems that they cannot afford to retire as they have not build up a sufficient nest pile to last their golden years. Would you want to work till you are eighty?
There is no right time to begin retirement planning. The best time, however, is NOW. Not tomorrow but today. The more you procrastinate, the more difficult your retirement plan will become. Some think that making retirement plans are difficult or intimidating. It doesn’t always have to be that way.
Firstly, calculate your monthly income. Then, calculate your monthly expenses – loans, bills, food, travelling, cigarettes (stop that if you can), medical fees, etc. Then, deduct your expenses from your income and you will know how much you have left to save for retirement. At this juncture, you must bear in mind that this is only a basic nett income on a monthly basis without taking into consideration inflation, big ticket purchases and emergencies.
Next, ask yourself when would you like to retire and how many years would that be from your current age. Assuming you are now 30 years old and you wish to retire at 55, you only have 25 years of working life to earn and save for life after 55. Again, assuming that you are going to live till the age of 75, you will have to earn and save enough to cover 20 years of your golden age.
If you wish to have say, $2000 monthly to spend upon retirement, you will have to start now to have a goal to accumulate $480,000 ($2000 x 12 months x 20 years) in savings by the time you reach the age of 55. So, you only have 25 years to accumulate $480,000. Are you on track? Does it sound achievable or are you now realising the enormity of the task ahead of you?
It cannot be overemphasized that you need to have a retirement plan now if you have not started. It is never too late to start planning. It is only too late when you have reached retirement age only to find that you did not plan at all to deal with life thereafter.