The harsh reality is that we’re living in an age where we have to work longer, facing more demanding housing and living costs, and many of us don’t stop to think about saving for retirement. Unfortunately, we’re also an aging population. And your Social Security retirement benefits, which are determined based on you Social Security earnings, are likely to cover the basics alone. Therefore, it’s never too early to start a retirement fund for yourself.
You don’t want to fall into that trap that half of US citizens have, where they only have $2000 saved for their retirement! 36% of workers surveyed in one report confirmed that they save nothing at all for their retirement, and 35% of American rely on their Social Security benefits alone. Coupled with this is the uncertainty which comes with pension deficits caused by the baby boomers generation – Meaning that state and local government benefit funds are underfunded by several billions of dollars. The state of California alone is underfunded by approximately $325 Billion, the equivalent of $22,000 per person. Therefore, it’s essential that you start to plan and contribute to your retirement in your 30’s.
You’ll be entitled to Social Security, which provides full benefits to working people who retire and apply for benefits at age 65 or older, or reduced benefits to those retiring and applying for benefits between the ages of 62-65. However, this age is expected to rise, and to achieve a more comfortable standard of living, it’s essential to make additional provisions.
By the time you hit your 30’s, you should be through college and established in a career of sorts. Therefore, this is the perfect time to start your retirement plan. It’s a tricky decade in that you’re also likely to be saving for a down payment on your first home, a wedding, or even a new arrival – However, there’s always room to plan for the future.
The first thing to do is reassess your debts and identify any leverage for reducing them and paying them off. When everything is in place, you should look to join your company retirement plan. Typically your company will contribute towards your pension plan through a defined contribution plan, defined benefits plan, or a hybrid cash balance plan, which is effectively the same as a salary increase. If you are self-employed, you can save part of your income in a special tax-favored account called an Individual Retirement Account (IRAs) and Keogh plans.
You should absolutely be saving for your retirement in your 30’s, as the sooner you start, the bigger the individual retirement pot will be. Prioritize saving for your first home, and then sign up to the defined contribution scheme or defined benefit scheme available to you, as soon as possible.
Laura Susstance is a content writer from London, UK. as well as actively contributing to guest blog posts she also writes on her own website: Fast Payday Loans Review