Top Eight Retirement Planning Factors for Young People
It’s often something that is not even a concern for young people, but thinking about retirement is not something to be put off for later. Most young people in their 20s and 30s will defer their 401(k) participation to later years or contribute a small amount of money, but this is a vital period of time for your retirement plans. It is never too early to start making your retirement contributions as this guarantees financial security during retirement. As a young worker, you should consider the following factors when planning for retirement.
- There has Been a Significant Increase in Life Expectancy
With medical and general quality of life advancements extending the human lifespan by leaps and bounds, there is reason to expect your retirement to last much longer than your grandparents’ or even your parents’ retirements. The amount of social security that one will pay mainly depends on their potential longevity.
- It is impossible to plan for social security
Young employees born in the 1980s are less likely to benefit from the social security system due to recent legal modifications. Therefore, it is a good idea for young employees to have other retirement plans apart from the social security system as it is no longer reliable.
- Medicare is likely to Change
Currently, the retirees enjoy a national healthcare program, but things might change in the future. The unsustainability of the current Medicare plan means that things might not be the same in the future hence the need to have alternative healthcare plans to cater for your healthcare needs in retirement.
- The Flexibility of the Cash Value Life Insurance
You can save a lot of money by taking advantage of the new Life insurance policies that will protect you from long-term care risk, disability, and at the same time help you accumulate tax-free retirement income.
- Consider your Lifestyle
Young people have an opportunity to gain a lot of money in interest by taking advantage of compounding. Therefore, it is a good idea to save a lot of money considering the kind of lifestyle you want to live during retirement.
- Begin Saving Small Amounts Now
Compared to other generations, millennials have a decreased salary potential and at the same time face less job security. However, this does not mean that all hope is lost- even setting aside small amounts will compound, leaving you with at least a decent chunk of money for your retirement.
- Consider the Stock Market
Investing in the stock market can help boost your retirement savings, as compared to savings accounts that do not guarantee any major growth. It may be trickier and carry a greater risk, however, so talk to a financial professional before making any decisions.
- Long-Term Planning
Long-term planning is critical when it comes to long-term savings. It is advisable to consult with financial advisors as early as possible to and begin saving before it is too late. Bedrock Investment Advisors can help you find the right solution for your future.
