Are You Saving For your Retirement?
Here are five reasons, states ING, why starting early to save for retirement makes sense:
- You may live quite a long time in retirement. Most people spend at least 15 to 20 years in retirement, so your life expectancy plays a key role in planning for how much money you’ll need and making sure your savings last.
- Your retirement lifestyle may be just as costly as your current lifestyle. Some people find that their expenses decrease in retirement—their house is paid off and children have moved away. Others find that their dreams for retirement come with big price tags. Depending on your retirement goals, you may need a minimum of 70 to 80 percent of your pre-retirement income.
- Social Security will not cover all your retirement expenses. According to the U.S. census bureau, today’s retiree gets less than half their income from Social Security. The rest will need to come from other sources, including personal savings and pension plans.
- Inflation will erode the power of your savings. Inflation will take a bite out of your retirement savings. It may look like you’ll have enough income, but your money will buy a lot less in the future than it does today.
- Your employer-sponsored savings plan is one of the most powerful ways to save. Tax incentives make your employer-sponsored savings plan one of the smartest ways you can save. If you’re not taking full advantage of your plan, you’re missing out on a powerful savings opportunity.