As per a report from National Institute on Retirement Security, about two out of three 21- to 32-year-olds haven’t started retirement savings.
Why is that so?
For one thing, the approach and attitude towards retirement have completely changed. The young working generation doesn’t believe in waiting for decades to live the “good life” or put a pin on their dreams for a day that may or may not come.
There’s nothing wrong with this approach. But there is a basic miscalculation in decision-making with not starting as early as possible when it comes to planning for your financial future.
That’s because the earlier you start, the easier it is.
Although retirement care is the last thing in this generation’s mind, just taking an initiative could prove to be extremely beneficial in the long run.
- The longer money works, the better the potential returns.
- Retirement savings offer a chance to reduce taxes.
- A nest egg increases options beyond retirement.
Here’s how you can prepare for retirement care:
Increase your knowledge
Whether you’re planning to pay for retirement care with your personal savings or via government assistance, you must be aware of the potential costs and the various effective ways to pay for your retirement care. For instance, Medicare doesn’t pay for on-going long-term care, but Medicaid pays for some of the healthcare costs depending on your eligibility.
Develop a plan
The ideal thing to do for your retirement is to plan how much money you need to save as early as possible. You must have a realistic plan that’ll help you save money without taking anything away from your present living situation. Considering retirement options can be overwhelming so seeking help from a financial planner can help ease that burden.
Communicate your references
The smarter way to prepare for retirement care is before you or a loved one becomes ill, requiring urgent care. If you think you might become a caregiver in the future, you should start learning about subjects such as Medicare, living wills, and powers of attorney. It’s also best to communicate your preferences to your family members – about how you would like to receive care or what kind of retirement care would you prefer.
And saving early for retirement will not only help you with retirement savings but also developing an early habit of not spending 100% of your paycheck, you’ll be better positioned to save for other goals like:
- Building your own business.
- Buying your place.
- Going on the trip of a lifetime.
The bottom line is the younger you start saving and investing, the less you have to work to have a financially secure future.