The Importance of Retirement Planning

How many of you currently have a retirement plan in place at this very moment? I’m betting only about half of you said you had at least some sort of plan. Retirement planning is more important now than it ever was in the past. The pandemic has shown us how quickly things can change. At one time most people knew they had social security to fall back on.

The future of social security isn’t as certain as it once was. Now, we all have to have a plan in place years before we even think of retiring. The best thing my father ever told me when I got my very first job was to start a 401K and have a retirement plan. He said if I started my retirement planning from day one (you can search for retirement planning near me for professional advice) then I wouldn’t have to rely solely on social security. I could live comfortably in my old age. He also said you just never know what will happen and having that money may be the difference between surviving and thriving.

He was right! Retirement planning falls more and more on individuals than it once did. That is why it is so important to begin planning in your 20s. So when I first began planning my retirement I depended on help from others since I didn’t honestly understand what I was doing. That has changed in the past few years.

In fact, I recently began searching for the right tools to help ensure I am doing everything I can to have a good retirement. Pigly has a Retirement Calculator that can help figure out where I stand and where I want to go. I entered my information just like above.

Then I get the above results. I have played around with the numbers a bunch looking at what would be comfortable for me now to put money into as well as be able to live on when I reach retirement age. I worry about depending on social security as well as Medicare because those rates are raising next year and I worry they will be sky high when I retire.

While I know that I will most likely depend on Medicare and an Medicare Advantage plan when it comes to healthcare I want my social security, whatever it may be, to be a secondary income. I want to know that I can go to the store and buy groceries without having to worry.

I see how much my mother worries and how it stresses her out that she now has to depend on social security. It is one of the reasons that she lives with us. Yes, she planned for retirement but then my father’s death came out of nowhere and her own illness that ended up depleting a lot of her resources.

Retirement is a topic that needs to be discussed often in your home. Children need to begin their retirement planning from the moment they get a job. Actually probably before that. At least knowing what a 401k is, what a retirement plan is, why they need, and how to ensure it lasts them the rest of their lives.It’s far too easy to hope and figure they will learn how to take care of their retirement when the time comes. They won’t.

If we have learned nothing from our own current situations it’s that our future generations won’t plan for what they know nothing about. ost people never think about retirement until they get closer to the age. It is a discussion that needs to happen early in life. It’s a mentality that we need to get beyond. If we don’t another pandemic may show us just how unprepared we are.

Many times people have to use their savings, even their retirement savings, because something came up. Something happened like a pandemic that has left us without steady jobs or incomes. So we spend what we have saved hoping there will be time to recoup what we’ve used. I do my best to ensure I have a year’s worth of bills saved if I need it. When it came to retirement planning I made sure that if I had to touch any of the money I would be left with at least five years of savings for it. It made things tight at times but I needed that reassurance.

Of course, there are options when it comes to managing through your retirement. If you have managed to purchase a house in your younger years then each month it will be building up equity. If you need some cash during your retirement you can take it from your own home. Believe it or not your home may be able to release up to $970,800 as a cash lump sum. 

In order to get access to the equity that you and your home have been building you will need to apply for a reverse mortgage. So what is a reverse mortgage? Well, it is a federally insured program that allows users to withdraw a tax free lump of cash from their own home. The good news is there are no monthly payments added when you withdraw the cash. This can be done while you still live in the property and you won’t have to move out or sell up. 

Remember, weigh up all your options before deciding on the best one for you. Never rush into any decisions that involve money as this could be disastrous. 

If you have no yet begun planning for your retirement, take some time to start. While I would love to say it is never if you are in your 30s and haven’t begun you are considered a late bloomer. If you have children teach them to start planning when they get their very first job. Thanks to my father teaching me the importance of retirement planning if I had to retire today I would be able to live well beyond when social security kicked in. If I was really thrifty I could stretch that out.

DO YOU HAVE A RETIREMENT PLAN? DO NEED TO SET ONE UP? SHARE YOU THOUGHTS WITH US PLEASE.