Last year my mother retired from the public service after serving for 37 years. Her biggest dilemma when she was approaching retirement was balancing her life with the life she wanted to live in retirement.
Her employer had organised seminars for those retiring — which should be done from early employment years because youth is wasted on the young. Often, money is, too.
Back in my corporate world, I stress the importance of planning for retirement as well as saving for future goals with every person I hire.
Before the start of their first assignment, I sit down with each new team member and show them how to save for retirement without stress, worry, complexity, or pain. To live well in retirement, you no longer can rely solely on a company pension plan or social security. Instead, you will depend on how skilfully you plan and invest, and whether you make good use of tax-advantaged savings plans.
I’ll allay your fears by addressing a few of the worries I’ve heard throughout my years of helping others set up retirement accounts.
Too old to save for retirement
I frequently hired employees who were older than I was —often in their 40s and 50s —with no retirement-savings plan. Fear had long ago set in, and they figured it was too late. They were stuck; they had missed their opportunity.
Not true. While it’s true that you’re better off starting at age 25 than 50, it is also true that you’ll be better off starting at age 50 than, say, 70. Then again, 70 is a better start than 90, isn’t it? The past is the past.
We must stop peering at the rear-view mirror and instead look ahead toward the horizon. As long as you’re still breathing, it’s never too late to start. It’s never too early, either.
I’m too young to save for retirement
Too young? Are you insane? If you’re younger than 30, you have it made. Young people, no matter your tax bracket, have a significant opportunity to become truly wealthy thanks to the power of compound interest.
Compound interest is the best way to grow your money over the long haul — so start while you’re young.
I don’t make enough to save for retirement
There is no reason you shouldn’t retire a millionaire. That’s right: virtually everyone, even minimum-wage earners, has the opportunity to be a millionaire when they retire.
Inflation will hurt my retirement nest egg. This is the only myth that is partially true; however, its truth is irrelevant. While it is true Shs10 ten years from now will probably have less buying power than Shs10 today, the flip side of that coin is also true, and considerably more important.
I’d rather spend my money on something else. When intentions are good, this excuse occasionally sounds like the most compelling reason to avoid saving for the future.
True, we sometimes cling selfishly to money, using our income to buy superfluous trinkets of ostensible success (cars, shiny gadgets), but frequently we want to use our money to contribute beyond ourselves (charities, non-profit, and loved ones in need).
Contributing to others is certainly admirable, so I want you to contribute generously. But I’ve found the best way to help others is to help yourself first — the best way to give generously is to have more to give.
Investing in yourself first helps you flex your giving muscle. There’s a reason airlines tell you to “secure your own oxygen mask before helping others”: if it’s easier to breathe, it’s easier to help people in need. I don’t have enough time or knowledge to manage my retirement savings.
It’s true you and I will likely never have as much financial wisdom as the experts, but that’s precisely why we must seek out tools developed by trusted, reputable experts. Anyone who has cared for an aging parent knows first-hand the toll it takes on their loved ones and their savings. Both the time and money needed to provide quality care can be staggering.
Adopted from Business Daily