When you’re young you tend to avoid thinking about retirement. It can seem like impossibly far away and you probably don’t have the money to start saving. However, being young is actually the perfect time to start, the earlier you start the bigger your pot will grow, and the more comfortable you’ll be during retirement.
The good news is that it doesn’t matter how late you start planning for retirement, simply starting is a step in the right direction. That’s why you should talk to a financial planner about retirement planning today and start the ball rolling.
There are 5 great reasons for starting your retirement planning today, no matter what age you are.
- The Right Mindset
The sooner you start saving and planning for retirement the better off you’ll be when you reach retirement. But, more importantly, starting today will help you get into the mindset of saving.
You’ll find that once you start saving it becomes addictive helping you to save more and enjoy your future retirement.
The simplest way to start is to remove the funds from your account and save them as soon as they are paid in. This prevents you from having the opportunity to spend them. Once you start seeing your fund increasing you’ll want to add more and more to it.
- Emergency Fund
Discovering the power and enjoyment of saving means that you’ll be more prepared and able to create an emergency fund. Of course, while you’re saving this you may be able to dip into your retirement fund in an emergency.
But, having an emergency fund means you have enough money to cover unemployment for 3-6 months or you can handle unexpected appliance breakdowns and similar incidents.
It may seem peculiar but learning to save for retirement will help you to save for emergencies as well.
- Inflation
Inflation can be a killer. The set amount of funds you use every week today will not be worth the same in the future, thanks to inflation.
In short, what $1 gets you today is likely to cost you $1.50 or more when you retire. That means you’re going to need more funds!
Starting retirement planning today means you’ll be prepared for inflation and able to deal with it while maintaining your quality of life.
- Make The Most Of Your Money
Whether you’re saving a small amount each wok or a large amount, you’ll want to invest it properly and make the most of the compound interest on offer. This is the primary reason why you start saving as young as possible.
Compound interest basically means you’re going to earn interest on the interest you’ve already earned. This can make a big difference in the size of your final pot.
Using a financial planner you’ll be assured that your funds are in the best possible place to gro, making the most of what you can afford to save.
- Prepare For All Eventualities
Finally, undertaking retirement planning today means you’ll be ready for any eventuality. It’s impossible to predict the future. You don’t know if you’ll make retirement age or if you’ll need to retire early because of the health of employment issues.
By starting your retirement planning now you’ll be in the best position to enjoy life, even if retirement isn’t when you expect it to be.
You should also consider the fact that pensions are generally exempt from divorces, should this happen between now and retirement the funds you’ve worked hard to save will still be there for you in the future. While you hope this won’t be the case, it’s good to be prepared.