Retirement might sound terrifying and daunting, especially if you don’t have planned it well. For any working American, the end of their career might not be pleasant. But if you have done your savings and investment right, you are pretty set for your after-career life. One might ask, is earning a decent income enough to live a financially stable retired life? It is with good planning and preparation.
The problem of retirement
Retiring at the age of 65 is almost impossible if you don’t think ahead. A recent research survey conducted by CreditNinja has found out that laid-back Arkansans don’t start worrying about their retirement until around the age of 42; on the other hand, people in Wyoming start as early as 20 years of age (see CreditNinja’s infographic below):
Many people worry about not being able to fully retire like they planned (nearly 1 in 3) and have to do some form of part-time work even when they are growing older. The pandemic has also hit people hard financially, forcing them to reassess their retirement age.
People who don’t have a retirement fund or their savings in check will probably have a difficult time in their retirement age. Further complicating retirement for those nearing retirement age, 15% had to withdraw retirement funds early as a result of complications brought on by the COVID crisis.
The survey also found that over 1 in 5 (21%) people say the financial stress brought on by the pandemic has forced them to reassess the retirement age they had originally planned. In addition, a third (36%) of those aged 55 and older who had plans to move say the pandemic has also quashed any plans of relocating and resettling to a different city after retirement.
Plan your retirement well
Not all people think about their retirement early, most start worrying about it later in life, and many can’t afford to fully retire as planned. Not only is this stressful, but it is also frustrating. But you can easily avoid the stress in your later life if you plan your retirement well.
Here are some of the best pieces of advice the late Gen Xers and Baby Boomers would give to younger generations:
- Start a retirement fund in your 20s
- Work on building a good credit score
- Start an emergency fund
- Educate yourself on the stock market
- Save for a house deposit as soon as you can
- Learn how to do your taxes
- Eliminate your debt
These are some of the best tips for having the financial stability needed to lead to a better retirement. Planning your finances early, like starting a retirement and emergency fund in your 20s, is excellent for your financial stability. But having good knowledge about the stock market could also help you grow your money leading to financial freedom.
Finally, experts advise diversifying your savings. Earning 1% interest annually on most savings accounts is not even enough to keep up with inflation. Investing, bonds, real estate and other types of investments, help you to grow your retirement plan more quickly.
Maria F. Rivera grew up in Tegucigalpa, Honduras, where she spent her school years mastering English. Briefly lived in Taipei, Taiwan, where she learned basic mandarin and explored the culture. Now she spends her free time volunteering for Operation Smile and has even traveled to different countries helping children with cleft lips and palates.