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Most people don’t think about financial matters from a long-term perspective or even know when to start saving for retirement. You should start saving at an early age, twenties or thirties, but most of us may not start saving until our forties. It is never too late to start saving, but as you age you may have to put more away depending on the age you start.
You need to accept the fact that you will probably live longer than you expect. With the advances in the medical field, people are living longer than they were 20-30 years ago. Many workers will retire before they expect to, and before they are ready. Four out of ten retire due to poor health, job loss, or caring for a family member. Most retirees have to return to work because they didn’t save enough and their income is not enough to support them. By planning early, you may be able to avoid having to return to work. Inflation plays a big part that most don’t incorporate into their savings. Few people have the skills to manage their income and to keep up with inflation and this reflects in their savings (or lack thereof).
Everyone needs to learn how to manage their retirement savings plans. Most workers lack basic financial knowledge but need to become experts about work benefits. It is beneficial for you to seek qualified professional help in this area to fully understand your options. Asking friends and family for advice is another option however advice from a qualified professional is best.
Other things to consider for your future plans are long-term care and providing for a spouse. Many people underestimate the chances of needing long-term care. Few people consider long-term care insurance and most people are either not aware this is available or know it is available but cannot afford it. Most married couples fail to plan for the eventual death of one spouse resulting in a drop of one income. Of the genders, there are more single women that live in poverty in old age.
You must be able to make your money last for a lifetime. People often pass up opportunities for a lifetime pension or annuity and choose a lump sum. It is all a matter of preference, however wouldn’t it be better to have a guaranteed monthly income than try to budget money that you have not been trained properly to manage and that money not last? It is most certainly a personal choice.
Be wise and get the education you need to understand how to plan your own financial future. You will be glad you did.