Here’s a scary truth: almost half of the Americans aren’t saving anything for retirement! You would raise the question “why?”
Firstly, majority of the people have no idea how a retirement plan works. Secondly, there is a perception that people have a limited budget so they can’t afford savings. Well, saving for retirement is good for no one other than you!
Stop being scared and think about your future. Let’s clarify the myths about retirement plans and study the actual facts:
Saving For Retirement Is Certainly Not a Scam
People generally believe that retirement plans are scams. However, they operate exactly like a bank account with some additional rules. An investment account and a bank account both are accounts opened with institutions where you deposit money to stay safe. Also, you can withdraw them when required. The difference comes when the investment bank invests your money in stocks, bonds and other investments. You can carefully choose among all options of investments. If you have enough money you can invest in more than one type of investment and increase your portfolio. So there is nothing to be scared off.
Make a Small Monthly Contribution
People get scared with the idea of a smaller paycheck. The truth is that almost everyone tends to spend some extra money and they think they can barely survive. For instance you would buy coffee from Starbucks instead of making it at home because you wake up late! Now, isn’t this an excuse? At the end of the month you find your account empty. Just think if you can allocate only 10% of your monthly income to save for retirement would it be hard to manage? Okay, some of you can’t afford this much. 5% would also work if you start saving at an early age. You can start early with a lesser amount instead of start saving at the age of 40.
Something Is Better Than Nothing
Some people spend years staying confused on the best investment option. We would rather advise you to invest in any opportunity and not skipping any more time. Even if you couldn’t avail the best option, we guarantee that you will still be in a safer position compared to no savings for retirement. If you come across a better opportunity later, you can simply change your investments! Isn’t this amazing? There are no taxes or any complications if your want to change your investments so what’s he worry?
Follow the Sign-Up Process
As we mentioned earlier, the investment account is very similar to a bank account. You just have to open it like every other account. Ask for help if you face trouble filling out the forms. Mostly you will find someone who helps you with all the paperwork. Majority of the paperwork relates to your personal information so it’s fairly simple. For example you would be asked to fill in your name, address, social security number etc. you state the amount you can save each month and what do you want to invest it in.
It is pretty straightforward and in case you want to change it in future, you can easily do so.
Not Saving For Retirement Makes Your Future Harder
People who tend to ignore such investments and plan nothing for their old age realize at the age of 60 about the opportunities they missed out. When you retire it’s the Social Security that helps you with your basic medical care. But what about your long term care? For a reasonable and enjoyable lifestyle you need to have a good income. If you have had a well maintained lifestyle all your life it would hurt to spend your adulthood counting every penny.
You can say “no” to such misery right away! By signing up for a retirement plan, you just have to cut down your extra expenses by a small amount. If you think long-term, this would be a great idea for a comfortable and healthy future.
Well, what’s your excuse now for not saving for retirement? You can certainly afford it, at least a small amount, and we have provided you with enough knowledge that can get you started right away! You owe this to yourself and you definitely deserve this. If your work place doesn’t offer any such plans, ask around. Your family and friends might be saving up and can give you a recommendation. Save your future because not doing so have some serious consequences.
The longer you save your money, the more it will grow. This means that people who start saving at an early age can save a lot of money till they get retired. If you begin late, you will have to put in a lot of money each month in order to reach a reasonable amount. You won’t regret it.