never retireWhile it is becoming increasingly popular to retire early or achieve financial freedom before 65, there are quite a few reasons why you should never retire.

People are Living Longer

It is projected that in 2050, over 20% of the population will be 65 years or older. That's up from 12% in 2000. With more people living longer, there comes more time to enjoy life and work if you choose to. 65 doesn't automatically mean you have to give up your job.

In fact, 65 doesn't mean a decline in health or physical capabilities, so if you want to work, you shouldn't let age hold you back.

You should never retire just because of the stigma around age. In fact, adults are expected to live to at least 84 years once they make it to their 65th birthday. That's almost an extra 20 years. Can you imagine being retired for 20 years?

No Retirement Security

It is well known that saving for retirement is important. However, many baby boomers, Gen X'ers, and Millennials still aren't saving and investing. This leads to a lower amount in savings, and a lower amount of money that can be used once a person has retired.

You should never retire if you feel you can't make ends meet. Even if you can afford your lifestyle, money is never guaranteed. Having a job, even if part-time, or a side hustle can offer you more flexibility, and money in your pocket. ...continue reading

retirement calculatorsIf you have been saving for your retirement and wondering if you’re on target with your current savings, there are tools available to help you find that out.

They are called retirement calculators.

But if you have looked at a few, you might notice they are not all the same.

There are some reasons why you should be wary of relying only on retirement calculators to help you determine how much you need to save for retirement.

They Give a Quick Overview

Free retirement calculators will give you a fast estimate of how much you should save for retirement. They are based on estimates of the average retirement age of any person, life expectancy, inflation rates, investment return, portfolio size, and retirement expenses. The problem with a quick estimate is that it is likely inaccurate. You need to delve a little deeper and take more time if you want greater accuracy in your figures.

They Make Assumptions

Part of the reason retirement calculators are inaccurate is because they use assumptions to make their estimates. For example, no one knows how long they will live, but it would certainly be better to estimate on the high side than to estimate based on the average and run out of money before you die. Several years ago, Social Security increased the retirement age because people are living longer, and obviously a longer life span means you need to save more.

So, what can you use instead of inaccurate retirement calculators?

Retirement Software

Retirement planning software is a tool that can help you determine how to plan for your future retirement. Some retirement calculators use clever ploys by claiming you can figure out what need to know “in 10 minutes or less”, but don't the last 30 years or so of your life warrant more consideration than just 10 minutes?

Retirement Coach

Another tool to help you plan for your retirement is a retirement counselor or coach. They can help you apply various scenarios to determine what life choices are the best for your unique situation. They can also help you to learn the principals of retirement planning, such as inflation, and how they can affect your savings. A coach can put things into perspective by helping you to estimate future retirement returns based on current data.

Saving for retirement is something we all need to do. But in order to know whether or not we are saving enough to secure our future, we must be able to estimate our future needs with as much accuracy as possible. Retirement calculators can help us with that task, but they may not always be accurate. This is why you should explore other options as well.

Are you wary of retirement calculators?

image2Finance, pensions, and savings are always a hot topic for people under 35. People are living longer and with the retirement age continuing to rise, the question is, how can young people adequately prepare for later-life?

There’s no doubt that we should be doing this, though, and financial planning isn’t something you leave until you’re in your 40s or 50s. 

It’s difficult to talk about money. A report by Fidelity found that although 92% of women want to learn about financial planning, 80% said they refrain from talking about money with family and friends. When you think about the student or credit card debt that a lot of us are in, it can be embarrassing to discuss this with friends – after all, we’re told that financial matters should be kept private.

So what should we do? Of course, my advice is always to warn against burying your head in the sand. If you’re worried about money or need help with financial planning, there are countless resources out there to help.

Younger people, especially millennials, have a reputation for being careless with money, but I don’t think that’s true. We’re savvy and when it comes to research, I like to think we’re pretty good at it. I know I’ve never taken a financial decision lightly and there are so many resources out there these days, which makes things much easier.

I think the key here is to take action now. Yes, that’s much easier said than done, but taking action means different things to different people.

For some, it means having funeral costs sorted out in order to beat further price rises down the line. For others, it means simply opening a high-interest savings account and storing away $100 every month. Investments are another option too, and although they require a little more research, they can really pay off. It all depends on your personal circumstances and what suits your current situation.

It’s true what they say – the sooner you save for retirement, the better. The ‘golden rule’ of saving around 10% of your annual salary is certainly a reasonable amount to strive for, and shouldn’t impact too much on your day-to-day living. If it does, reassess what you can afford and aim for that, with the overall goal of slowly bumping your savings up to the recommended percentage. It means you don’t need to play catch-up when you hit 40, where you’ll only end up needing to save a higher percentage to make up for it.