Even if retirement is a few decades away for you, there's a chance you're feeling behind on your future savings!
Have you ever felt behind on your savings? Or a better question might be; have you ever felt on top of them?!
If you're feeling stretched in areas like building up savings and paying off debt, chances are you have felt behind on your retirement savings too.
A few years ago, as a 20-something millennial that was aggressively paying off student loans, I didn't know that I also should have already started saving for retirement.
I thought I knew about retirement, that it was a time in your life when you were older and could stop working. To me, retirement was an age.
I now realize that this is a misconception, and that thinking this way is causing a big problem...
You see, retirement isn't an age. It's a number. It's an amount of money.
Those who save up during their working years by putting money into 401k's, 403b's, and IRA's are actively growing their number. Once you have enough money to support yourself and your family without fear of running out, you can retire.
I want you to imagine what retirement could be like for you. If you're on the younger side, this might be something you haven't done before. Imagine the BEST life you could live, if money wasn't a problem.
Would you travel? Where would you go?
What hobbies could you spend more time doing? What new skills could you learn?
Who would you spend more time with?
How would you feel in the morning when you wake up? Would you even have to set an alarm anymore?!
How would you feel going to bed at night after a day that was lived completely on your own terms?
Really think about it.
Because the problem is, most people don't think about it- until it's too late. Most people assume that retirement is an age and that everyone will get to do it once they blow out the 67 candles strategically placed on their birthday cake.
But the sad reality is, most people spend the majority of their lives working in a job they hate, and probably feel like they are living paycheck-to-paycheck (because most Americans are) therefore aren't saving or investing as much for their future as they should.
Without adequate savings, retirees are more reliant on Social Security benefits, which are probably going to be less than what you're used to living off of. In fact, Social Security is expected to be only 75% funded by 2034, meaning future generations could be getting 25% less than today's retirees. Since most don't want to have a lower standard of living, they will end up working longer or picking up part-time work.
Do you want to be working in your 70's and 80's? What about in your 90's?
Or, would you rather be enjoying the last stage of your life, living on your own terms?
If you don't want your retirement to suck, you have to save. I'm sorry, but that's the harsh truth.
But there's also another truth; the better you are at saving, the earlier you can retire.
Who says you have to be 67 before you can spend 6 months traveling Europe or taking 4 cruises with your family every year? (Hopefully we're allowed to do that by then, amiright?!)
The sooner you make investing for your future a habit, the sooner you can retire, and live the life you actually want to be living.
We are in a crazy pandemic time right now, which has brought some really one-off situations. Like an extension on 2019 taxes, which also means an extension on funding your IRA's for 2019. If you feel like you are behind on your retirement savings, now is the perfect time to start, because you have until July 15th, 2020 to contribute to IRA's for 2019!
Check out my recent post on this, where I show how you can catch up and retire with over a million dollars, just by opening and maxing out an IRA for yourself every year.
Just like any other healthy habit, we need to train ourselves to consistently save and invest for our future. The sooner we master this habit, the sooner we can retire. If you are like how I was, I challenge you to re-frame what retirement means to you. This might seem silly if you are in your 20's, but the sooner you re-imagine and start saving for your future, the better it can be, and the sooner you can have it.
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Hi, I'm Alicia, welcome to Friend of Finance! This site is a way for me to share helpful things I've learned from working in the financial industry, important money things that I probably wouldn't have learned otherwise, and things everyone should know about.