The Pros and Cons of Retirement PlanningRetirement Planning
Millions of people in the United States are making an active effort to plan for retirement. Some are actively contributing at least a modest amount of each of their paychecks into a retirement account, and some have even sat down with a financial planner to explore other ways to save for their non-working years. While many people are making an effort to save up for retirement, it is important to note that others are not. They may not feel as though they have any extra money to contribute to a retirement fund, or they may feel that social security will provide them with all of the income they need in their older years.
The Benefits of Retirement Planning
You only have to turn on the news to hear stories about the failing social security system. The Social Security Administration does send out statements to workers periodically that state your estimated earnings after retirement, and you may feel as though this income will be sufficient for your needs. However, this statement adjusts based on your last few years of income history, and the amount of benefits for all workers may adjust periodically as well. While most experts believe that social security income will still be available in the future, they largely disagree on the amount of benefits that a retiree may receive. There is indeed uncertainty in your financial future when you leave your financial security in the hands of the Social Security Administration alone. By planning for retirement on your own, you can safeguard your future.
The Downside to Retirement Planning
Many people believe that planning for retirement is too tedious and cumbersome. How are you supposed to project what your personal expenses, the rate of inflation or the return on your investments will be decades in the future? There is indeed some degree of uncertainty when it comes to planning for the future on your own as well, but you can use a retirement calculator and even meet with a financial planner to do your best. Keep in mind that it may be better to have a retirement account that is slightly overfunded or slightly underfunded than no savings at all.
While planning for your financial future may not be easy today, it can provide you with a more relaxed and easy-going life in the future. Whether you call a financial planner for assistance or use an online retirement calculator to develop your own retirement plan, there is no better time than today to get started.