We all know that we should be planning for retirement, and in truth it isn’t a very difficult thing to do. And yet, for many of us, there is a strange reluctance to get the process started. When we are young, we may naturally think that there is plenty of time before we need to start to think seriously about retirement. When we are old, perhaps even nearing retirement, we may decide that it is too late to start saving, that there isn’t enough time to make a difference. Both of these attitudes are counter-productive and are related to the psychology of retirement which can affect our abilty to think clearly about how we plan for retirement itself. Because we can easily convince ourselves that it is too early or too late to plan, it is crucial that we enlist retirement planning advisors who can help us develop a plan for saving that takes account of future goals and present needs. While everyone can benefit from working with a retirement planning professional, you should put it at the top of your to-do list if you find yourself agreeing with any of the following ideas.
“I am too young to worry about retirement”
When we are young and at the beginning of our working lives, it is very difficult to imagine ourselves getting ready to retire – and for that reason, it is relatively easy to say to ourselves that we will deal with it “later.” However, the financial decisions that we make when we are in our 20s can have a huge impact on our financial well-being decades later. Small amounts of money saved in your 20s will, through the power of compound interest, result in a much larger bank account by the time you retire than larger amounts of money saved later in life. The biggest favor you can do to your future-self is to save a bit of money each month from as young an age as possible.
“Anything I save will disappear overnight”
Those of us who have witnessed some of the most volatile markets in nearly a century will probably have heard stories of people who lost every penny they had saved when a market crashed or a bubble burst. And indeed, many did. However, this is not a good reason not to save – it is a good reason to be sure that you have a balanced portfolio of assets so that you are not vulnerable to overnight losses. Some investments will carry more risk than others, but can be balanced against less risky investments.
“I am too old to start saving”
For many of us, the reality of impending retirement is the shock it takes to get us really thinking about how we will survive without a paycheck in the next few years. At that point, perhaps with no real savings in the bank, a sort of fatalism can settle in and we decide that there is no point trying to save. However, the reality is that it is better to have saved less than to have saved nothing at all. A financial planner will be able to help you evaluate your current assets and may be able to help structure a savings plan that will leave you in a better position for retirement, and hopefully take some of the stress out of your life.
In different ways, we can be our own worst enemy when it comes to planning for our financial futures – that is exactly why it is important to seek the guidance of a financial planner who can help to dispel the myths about retirement.