Having a good retirement plan is the best reward you can give your future self for working hard all your life. After spending all those decades working relentlessly, plenty of people look forward to the time when they can take a step back and finally put their feet up. However, generations are now facing various challenges and concerns when it comes to their retirement plans. Baby boomers find themselves outliving their long term care and retirement funds, Generation Xers are trapped supporting two generations, and Millennials are struggling to find their footing in today’s world.
At present, research shows that 80% of people aged 30-54 do not believe that they will have enough money for retirement, and 63% of people who start working at 25 will end up relying on Social Security, friends, family, or charity. Add the fact that the average lifespan of Americans is increasing, and we have a disaster in the making.
While the odds may be against us at the moment, a great and sustainable retirement plan is still a necessity that every American must fight to have. It is not as easy as it was, but it is not impossible. To help you in planning, here are three essentials that every retirement plan should have.
People are now more aware and adamant about keeping their health up. Thanks to better access to medicine and healthcare, people are living longer. We are now more conscious of what we ingest and which activities we do to keep our bodies running longer.
However, the downside of longevity is the possibility of longer sick years. 7 out of 10 people will need long term care as they age, and one of the biggest mistakes that you can make is to assume that you are part of the 30% who will end up not needing any form assistance.
The trick in having an effective long term care plan is to start as early as you can. There are various ways in which you can pay for your long term care, but start exploring your options while you are young. Long term care insurance companies offer various discounts for their younger applicants.
Inflation can decrease your purchasing power over time. Underestimating inflation can have dire effects on your future financial stability.
LIMRA Secure Retirement Institute studied the effect of inflation on a person’s Social Security benefits in a span of 20 years, and they discovered that a 1% inflation rate could take away $34,406 from a person’s benefits.
There are no set guidelines on how to properly go about retirement investing. What you can do is meet up with retirement counselors to create a plan that is tailored specifically for you. However, do not just rely on that. Take the time to read up on it. Research and acquire as much information as you can about it.