Why We’re All Thinking About Retirement Way Too Late

In this article, we’ll see why so many people don’t think about retirement on time and how to start preparing before it’s too late. 
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For most young adults, retirement feels like a lifetime away. There’s always time to think about it in the future, right? It’s something your parents have to think about, not you. No way. You’re too busy building a career, traveling, finding your way around student loans, rent, trying to save up enough money for a downpayment on a house, etc. It’s still too early to think about retiring.

And then one day, you wake up and you’re 55. Where did all those gray hairs come from? It was only yesterday that you were dancing on TikTok, looking like a deranged clown. Now, you look like someone who will retire soon but, man, you didn’t think about that at all. What do you do? Panic. Or go back in time and make some arrangements. 

Internet culture is all about living in the moment and that gives you the idea that growing old can wait. But if you wait too long to prepare for retirement, your finances won’t be in a good place unless you win the lottery.

In this article, we’ll see why so many people don’t think about retirement on time and how to start preparing before it’s too late. 

Reasons Behind Not Thinking About Retirement

Your parents, their parents, and their parents’ parents usually had one stable job for decades and they were able to save up enough money for retirement. But you probably want to live your best life so you say YOLO and launch a side hustle, travel, or whatever else. The goal? Enjoy life and deal with the future later. The Internet is a huge problem here because, if you scroll through any social media, you’ll see memes and jokes about putting off responsibilities and being scared of growing old. 

And on top of all this, you have actual financial issues you try to keep up with. Huge student loans, rents that keep rising, and wages that aren’t keeping up with inflation. In fact, numerous studies have shown that a large percentage of people under 40 have little or no retirement savings. 

And how do you really plan retirement? How do you know where you’ll even live? Will you be healthy enough to live by yourself or will you move into a nursing home? And while we’re on the topic of nursing homes, did you know that 209 facilities (41%) have received a below- or much-below-average overall score, and that’s just in Indiana? Imagine what that number would be for the entire country and you’re supposed to plan how you’re going to pay for a facility of this kind now? 

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All things considered, is it a surprise that young people don’t want to think about their golden years?

Tips on How to Start Planning for Retirement Early

Things aren’t looking great, but the truth is, you only have yourself to rely on. Regardless of how the situation is now, you have to think about the future. 

Here’s how to make it easier. Or at least more manageable. 

  • Set Clear Financial Goals

Think about how you want your retirement to look like. Do you want to travel the world, live in the countryside, be close to your family? Once you have a rough idea, break that long-term goal into smaller milestones. For instance, set a goal to have a certain amount of money saved up by a specific age. 

Think about your income right now, your lifestyle, and expected inflation to figure out how much you’ll need. You can even use a retirement calculator online to see how much you should be saving each month. 

  • Start Early

Start as early as possible because the power of compound interest can significantly boost your retirement fund over time. 

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Let’s say you save $100 a month and you start at 25. If we assume there’s a 7% annual return, you’ll have around $240,000 by the time you’re 65. But if you wait until you’re 40 to start, you’ll only have $85,000 by the age of 65. 

The earlier you start, the more time your money has to grow. 

  • Use Retirement Accounts and Employer Benefits

401(k)s, IRAs, and Roth IRAs are excellent tools because they help your money grow faster with tax benefits. With a 401(k) or traditional IRA, you don’t pay taxes on the money until you take it out when you retire. 

Roth IRAs are different; you pay taxes now, but later, withdrawals are tax-free. 

If your employer offers a 401(k) with matching contributions, make sure you contribute enough to get the full match. 

Conclusion

Golden years will come sooner than you think and if you don’t start thinking about it, you’re up for a nasty surprise down the line. Retirement can be the best time of your life, but if you’re broke, it will be a nightmare. 

Start right now, no matter how small, and you’ll still be able to set yourself up for a better future. 

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