My Financial Tips

Retirement is the most expensive thing you will buy. Perhaps you’ve never thought of it as such. You are paying today for the cost of your retirement tomorrow if you are putting money away for retirement and if you are not paying into retirement today than you are not planning for the future. The most expensive thing you are purchasing is whether you are living in rental property transportation.

It’s very important to think about it today. In the case if you are relying on Social Security to support your retirement needs, you will find yourself on the short end of things.

- Today we are living longer past retirement.

- Social security benefits do not keep up with the cost of living.

Social Security is to augment your retirement and not carry it. That means you will have to shoulder the greater cost of your retirement and only fewer companies are providing retirement packages for employees. In the case you are self-employed you carry the responsibility of a retirement plan. Social Security only provides a minimum foundation of protection. A comfortable retirement usually requires pensions, investments, savings and Social Security. Unfortunately a lot of people are not familiar with even the basics of investing.

You may have more pressing financial needs and goals than buying something so far in the future that’s why saving and investing may seem like an impossible task to do. We live in a society of instant gratification. It means that if you don’t have the cash on hand you charge it and this is really the biggest pitfall as the interest you pay on charges could be something else you could have bought had you saved prior to charging the purchase.

Some people are increasing their present income by part time employment such as getting a second job close to where they live or going the online employment route or starting your own business.

Lets take the example. Imagine you started saving/investing $50.00 on a monthly basis at an early age of 23. By the time you reach 65 you will have $1,000,000.00 in savings/investments if earning 8% annual interest if you start the same when you are 43 you will only have $3 to 400,000.00 dollars.

Pf course you may say that you are not a young wiper snapper any longer and only a few years from retirement and even then not all is lost because the government had already recognized this dilemma by passing an act in 1997 the “Savings Are Vital to Everyone’s Retirement” (SAVER). The goal of the mandate is to educate Americans about retirement savings. So the CERTIFIED FINANCIAL PLANNER exists to benefit the public by fostering professional standards in personal financial planning, so that the public values, has access to and benefits from competent and ethical financial planning.

In conclusion it should be added that planning for retirement is an individual thing but the sooner you start the better you will be.

Read more about 401 retirement plan topic in this article.

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