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Are You Too Young for a Retirement Plan?
By Frank Watson

When thinking of ones retirement plan, most people only think of how old they will be when they retire, there are other factors to consider; how old a person is now, how old they may live to be, the type of investments they have already made, the type of return those investments are thought to bring, and how much money a person will need to live well during retirement are all important things to consider. Age as a factor is important because many people don’t think they need to save for retirement until they are between 40 and 50 years old, this is not going to secure a quality retirement; in ones retirement plan they should count on saving money and investing by the age of thirty, and should count on saving a bit of money in their weekly budget.

Investments

Wise investments for retirement planning include: bonds, IRAs, 401K, and a company matched pension plan. Bonds are loans the purchaser gives to the company the bond is purchased from which earns a set amount of interest over a set amount of years, these are low risk and predictable. 401K plans are tax sheltered retirement saving plans which many companies will match a percentage of the employee’s investment sometimes up to 100% matching; this type of saving is tax sheltered or not subject to annual taxes, and is an essential part of any persons retirement plan.

Company pension plans are getting fewer as the years go on; companies are switching completely to 401K investment plans, pension plans may not offered to employees which were hired after a certain date. If a person wanted to supplement their retirement planned income with a pension it would be critical to check with their company to see if they may invest in that pension plan themselves, and receive company matching.

Start Planning Early

IRA is for individual retirement account, these accounts are also tax sheltered and as a bonus they offer a tax deduction each year they are contributed to; when money is invested it’s known as contributing, when money is withdrawn it’s known as distribution of the funds. Social Security is not a reliable part of any persons retirement plan any longer, anyone born after 1970 should count on not being able to collect social security until at east age 75, at that rate of increase it isn’t likely that any one born after 1990 will have any chance of collecting social security at all.

For this reason it is even more important for people, especially those who hope to retire early to have a solid retirement plan from a relatively young age or by 30 at the latest, and implement that retirement plan. If a person doesn’t calculate their needed living expenses accurately they may find themselves barely able to afford their medications.

Money is an important part of a retirement plan; other important factors to consider are what one will do after retirement and how long one expects to live. There are fun life expectancy calculators available on the internet and there are retirement calculators also to help one determine exactly what their needs will be.

Knowing if one plans to travel, garden, volunteer, or any thing else after they retire will help that person determine exactly how much money is needed for retirement. Everyone deserves a quality retirement; all it takes is planning, investing, and following through with the retirement plan.

Author Details:
Frank Watson retired from work a couple of years ago and now, in his spare time, writes articles, for various web sites about retirement and related topics.

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