Retirement is a place far away for many investors. Today's 30 year old likely has few thoughts about being older someday, or having a plan that far into the future. However, many of us here; have "been there, done that" and know how fast the clock of life moves along. At the very least, even a most modest investment plan into a balanced investment (50/50 equity-bonds), until a younger investor gains more knowledge; would be a prudent choice with a percentage of one's income. Several factors are in place today regarding "retirement monies".
1. traditional defined benefit pensions continue to be removed in the private sector,
2. and are being replaced by defined contribution plans (the individual retirement plan);
3. which leaves Roth IRA's as another choice to build a retirement portfolio.
This is not all inclusive, by any means; but indicates how much an individual will be on their own to establish a retirement plan. The next 20-40 years of retirees will find a much different monetary picture versus today's retiree's.
Aside from your own plan, you should help others you know to understand the future ramifications. First, an emergency money fund; then investments. Start and continue learning about establishing sound household budgets, as well as investing principles. The young ones today need to understand the value of time upon the compounding of their investment returns; as with every day that passes, will be the loss of this one time event that the clock of time will continue to erode.
Lastly, and this will not apply to all households; is the value of your own skills and time related to investments. When one saves money via their own skills, this too is a form of investing; or at least saving money that may be invested.
I have always been inclinced toward the technical side of life. I have earned a good living from these skills. These skills and desire have always been present in daily life, too; related to repairs/maintenance around the house and all related. I have paid myself a very substantial wage from some of this work by eliminating "outside labor", which is generally half of the cost of many repairs. A bonus being that I learned while doing, too. A plumber in our area will need $100 just to arrive at the house; and then the hourly rate and parts clock begins to run. While there may be some who will not be home owners in retirement; for those who are, what you used to "take care of" around the house will find a time when you can not or choose not to be the "fix-it" person. All of this will add up to lots of little piles of expense, that can become a large pile of money flows that will require spending retirement monies that may not have been in the original budget. In spite of the tv and print ads; you may have to postpone that retirement vacation to Bali !!!
For the young ones, don't forget to value your "D.I.Y." time; but also don't forget, that this will end at some point in the future.
Depending upon individual circumstances, of course; there are a larger number of retiree's today who also did not plan on the kids returning home to live, or perhaps monetarily bailing out their children. Things change, eh? One can attempt to prepare; or just say "to hell with it" and take the trip to Bali. To each, their own direction.
Hopefully, others may add some thoughts to this vast area of consideration.
Regards,
Catch
Comments
have a good week, Derf