Why You Need to Start Thinking About Retirement When You’re Young
thinking about retirement
Although most people retire after their 60th birthdays, it’s important to begin thinking about retirement when you’re young.
Planning for retirement in your 20s and 30s gives you plenty of time to get ready for your eventual retirement.
Here are four of the most important reasons you should start thinking about retirement when you’re young.
Your Money Has More Time to Grow
Thanks to compounding interest, the money you invest in your 20s or 30s will be worth much more when you retire than the money you invest in your 40s and 50s.
Even if you can’t afford to invest a huge amount of money when you’re young, it’s important to put aside whatever you can so that you can take advantage of the longer time period over which your money can grow.
You’re Better at Setting Priorities When You’re Young
Planning and working toward retirement is a lifelong process, but you’ll actually be more likely to have a happy and fulfilling retirement if you plan for it in your younger years.
When you’re young, your focus is mostly on the things you truly enjoy doing, rather than on the nuts and bolts of day-to-day living.
While both are necessary for a successful retirement, creating a plan when you’re young and using your working life to make it a reality will help to ensure you enjoy your retirement.
If, for example, you know you want to travel the world, you can plan to do it in retirement and use the time you have ahead of you to make that dream a reality.
Retiring Is Much More Complicated Than You Realize
Some people envision retirement as simply not going in to work one day and having leisure time for the rest of their lives.
The truth, though, is that there are many moving parts that you’ll have to learn to manage before you retire.
Getting ready involves finding the right investments, taking tax planning classes, managing your debts well, and a host of other things that will take you time to learn and master.
The earlier you start, the better off you’ll be when it’s time for you to retire.
Financial Goals Are Important to Discuss in Relationships
Although you won’t retire until your 60s, your financial planning will play a role in dating and marriage when you’re younger.
Before you get married, you need to be sure that you and your spouse can agree on basic financial goals.
This will save fights and misunderstandings down the line once you begin working together on your finances.
As you can see, there are many advantages of thinking about retirement when you’re young.
You’re never too young to start thinking about retirement, so begin planning and saving today.
Category: Retirement
