How to Retire If You Picked the Wrong Parents
The joke in my family, when one of us complained about some kid down the block having a shiny new thing that we wanted and couldn’t have, was, “You must have picked the wrong parents”.
If you picked the wrong parents, they won’t be able to fund your retirement. You have to do it yourself.
What are your resources?
Company retirement plan: Your retirement plan at work is most likely a 401k plan. You manage it. You pick the amount to save, and you pick the investments to make.
Your savings amount needs to be at least equal to any company match. Save less, and you are leaving offered money on the table.
But how much should you save? Ten to twelve percent of your income saved each year will give you a reasonable chance of a comfortable retirement by your late sixties, depending on when you start. If you can’t afford that right now, then save what you can. Each time you get a raise, increase the amount going into your 401k plan until you reach your chosen percentage.
What about investment choices? Each person has a different risk tolerance. For newer investors it’s not easy to figure out what your tolerance really is. Help is available. A good financial planner/advisor can offer you counsel.
Personal savings: It’s hard to put off what you want to buy today. So much in our environment emphasizes immediate gratification. And saving money means putting something off.
Imagine this for a minute—if you started making a real effort today to save money for your future, what would your 66 year old self say to your current self? If you cut your consumption a little here and a little there, what would your self at retirement say to your current earning self?
I think your older self with say a big, “Thank You!” I think your retiring self would breathe a big sigh of relief that your younger self had the wisdom and maturity to begin to save and provide money for your older self.
Start today to build a savings nest egg, and you will win the overwhelming gratitude of the only person who will always be there to say thanks, YOURSELF!
Social Security: Many people are asking, “Will Social Security be there when I retire?” My answer is imbedded in this question, “Who votes in greater numbers, 25 year olds, or 55 year olds?” So, Social Security will be there, most likely in a somewhat different form. You may have to retire later to receive full benefits. The benefit you receive may be calculated to produce a lower benefit amount than is currently offered. But, Social Security will be there. You will need to do two things in relation to Social Security. First, use the Social Security website to track your potential benefits. Second, make your retirement planning in relation to what you find out from Social Security. This will keep you in touch with the way your benefit develops.
So, you picked the wrong parents for a pre-funded retirement? Most of us did, and many of us are not letting that depress our retirement plans. The key is to start planning early, and review your plans regularly. You can maximize your resources and have a happy, successful retirement.