If you don't do something right now to assure your
retirement, you'll end up living in an alley fighting the
stray cats and dogs for your meals. Sounds blunt, but it
is a fact.
I actually did not think about retirement until it was
almost to late. I have seen other people my age do the
same thing. The reason is NO ONE talks about it. We don't
want to be reminded that we are getting older. We walk
around spending money, not saving it. We buy every gadget
we can get our hands on, or do the typical 'keep up with
the Jones' where we must do, look and be better then our
neighbor. STOP! Take a deep breath, exhale and let's
review what we should be looking and thinking about instead.
Your retirement plan will not look like your parent's
retirement plans. IRA's were just being created back when
your parents were planning, or not planning their
retirement. 401k's did not exist. So, what did they rely
on for their retirement money? Pension plans, social
security and savings accounts. Also, people did not live
as long as we do now, so their money did not have to go as
far.
Your retirement will be different. You will live longer
and have a more expensive lifestyle. Back in the day, your
parents could live on 70% of their income, but that
probably won't do for you.
Social Security for us may not be a reality. As they say,
no one has your back, sorry! We cannot rely on the
government to subsidize our retirement. The Social
Security system is broken, and many of us have heard that
we will be lucky if we see a dime of the money we invested
into it. As the baby boomers retire and put a strain on
Social Security, benefits will have to be cut or taxes
raised. For those in or near retirement, your benefits are
pretty safe. For the younger crowd, don't count on
receiving all of the benefit estimated in the statement
sent to you by the Social Security Administration every
year, three months before your birthday. Make sure you read
that statement by the way; you will find that there are no
guarantees being made!
What can you do now? It is never to early or late to start
saving for retirement. However you decide to structure
your investment is up to you. But like I have been saying
over and over again, start saving now! Invest in an IRA or
if you are self-employed, consider a SEP IRA. You can
also contribute to your employers 401K plan, and open a
money market savings account.
Your contributions to a 401K or IRA plan lower your taxable
income, so you immediately cut your income tax bill. (Be
greedy!) Plus, the investments grow tax-deferred -- i.e.,
you don't pay taxes on the growth and income until you make
withdrawals in retirement leaving more of your money to
compound through the years.
**Please speak to your CPA or Financial Advisor about all
your options and find out what is best for you before
making any decisions.
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