I can only speak for myself, but I when I was in my 20’s the last thing I wanted to do was sock away some cash for retirement. Come to think of it, I probably never thought that far into the future. I mean back then, retirement – even thinking about retiring wasn’t even on the radar screen.
However, one of the key mantras Financial Advisors preach is the benefits of compound interest. You know, invest money on a regular basis and not only does the interest build on your invested money, it also builds on the interest as well. Over 4 or 5 decades, that regular investment that you probably don’t miss much all along really adds up.
I am happy therefore that while I wasn’t much interested in the investing side of things, my wife was and still is. Oh at the time I balked at the idea, just as I balked at the notion of needing a will all those years ago. Of course, I’m still living and the will could have waited, but as it gave her piece of mind…
Come to think of it, without a will or investing in our futures, I’d be looking at an unstable retirement. Now it’s not that I am a big spender by any stretch of the imagination, but when retired, it would be nice to still have funds in the bank to do things now wouldn’t it? I mean who knows what friends you’ll make along the way in life and how awkward it will be if you have to keep declining doing things together because you’re nervous about running out of money when the earnings stop.
Time certainly does fly by quickly. Can you clearly remember 5 or 10 years ago? What about those babies you snuggled in your arms that are now graduates of high school and post-secondary institutions? Time goes fast and so does the cash! Don’t catch yourself lamenting, “Where did the time go? Where did the money go?”
So what’s this got to do with employment? Good question and thanks for asking. When you get a job; your first real job or a job after lengthy unemployment, you’ll be relieved and thankful you have some money that’s going to make your present life more comfortable. You may either be so happy you spend it frequently, or you may want to store some away to guard against money troubles that might arise until you feel entirely secure in your job. Both are reasonable behaviours when money was scarce and is now coming in thankfully.
Give a little thought though to socking some of this money into your retirement. I’m not an investment guru, won’t make any money whatsoever from this post for giving this advice; it’s just prudent planning on your part for the inevitable future. Look barring a complete disaster in which your life is terminated, you do plan on getting older don’t you? I mean few people actually plan on dying before they retire unless they have a medical problem. So you’re going to retire, the money from employment will stop, your government pension could be there to some degree, but plan for yourself and anything you get from an employer or the government will add to your income, and not make you solely dependent on them.
Now in my case, it was my wife as I say that really got me moving. She announced one day that she’d contacted the bank we deal with and we had an evening appointment with one of their Investors. This was years ago mind, and at the time I probably rolled my eyes and like a child lamented, “Do I really have to go?” Well maybe I did and maybe I didn’t, but it wasn’t something I jumped at in any event. Still I went and am glad for it.
You can do the same thing; without rolling your eyeballs. Every financial institution has these investment types. They essentially find out what you envision your retirement to look like and then figure out how much money you’ll need to live that kind of life. Working backwards, they figure out how much money you’ll need to invest regularly in order to retire with the funds you want. I mean it makes perfect sense. The earlier you get this kind of investing going, the less you need to invest regularly. Do it in your 20’s and you’ll hardly notice the small bit of money that goes to your own retirement and it compounds to higher amounts. Wait until you’re in your 50’s and you have to set aside larger sums and the compounding interest doesn’t add up as much because you’re doing so over a smaller period.
We still meet with this Investor a minimum of once a year. We get these statements all along where my wife and I can see how much money we are accumulating, and because she started with greater amounts than I did, I’m playing catch up to her. I get it though; not her money, (and this would be where the wills come in I suppose), I understand the process.
So my advice to you is to get your own investments going for your retirement especially if you’re in your 20’s or 30’s. You can have it removed from your pay automatically and won’t even miss it. Planning ahead makes you so responsible and you’ll thank yourself years from now.