Retirement Planning – The buzz word of the 21st century. Even before we start working, some have started planning for retirement. Despite the gradual increment in our retirement age each year, the age to start planning seem to get earlier. So when is it a good time to plan for our retirement. Is there a time too early?
Retirement Planning
So what exactly is retirement. Retirement is simply put having the freedom to choose what you want to do each day. Shiok Hor ?!
It is a dream that many wished waking up to, but having a proper retirement also mean having some things accounted for.
For instance, free from obligations / dependents or debts, having a paid-out house, a proper coverage for any medical expenses and sufficient savings or passive income to sustain our retirement lifestyle.
Is it too early? “Where got time think so far?”
Ever thought you still have so much time before you retire? It can be decades later, and the future seemed too blurry to start planning for retirement.
Is it too young or early to plan for retirement? Hmm, let’s see why you may want to think otherwise.
Planning Early
Remember the old saying “If you fail to plan, you are planning to fail” ?
Is it true for retirement planning too?
Having a proper planning early don't just make it easier for us to retire comfortably the way we want, but also gives us more time to re-evaluate how we want to live during our retirement.
But on top of these, here are some reasons outlining why it’s never too early to plan for one.
1. Compound Interest
“Compound interest is the eighth wonder of the world.” – Albert Einstein
Compounding interest will allow us to accumulate our savings for retirement at a much faster rate.
We have heard this multiple times before, but it is even more true for retirement since time is not always on our side, especially when closer to retirement.
1. You get to Save and Invest More
You have a longer time horizon to prepare for your retirement but what is even better is you get to save and invest more of what you receive each month!
At a younger age, you may have less dependent to support, more big decisions that has yet to be made.
Imagine yourself at age 40, having a huge loan on a house or a car. Retirement planning may seem to be something stressful when you find it difficult to save and invest most of your income since most may be used to pay up for the loans.
1. Rise in Healthcare Cost
One of the factors to consider and plan for before retiring is our healthcare since health issues arises as we grow older.
Not surprisingly, medical expenses are rising. Premiums for medical coverage and health insurances increases as we age and what is worst is when certain illnesses may be excluded from being covered if we fail to get covered early.
The biggest mistake one can make is failing to cater for healthcare expenses during retirement only to realize most of the retirement sum has been depleted to pay for healthcare expenses at a later age.
Planning To Retire? “Still Long Lah, I Got Time” Maybe you are just couple of years into the workforce or a student looking to start your career soon. Retirement may be a word too big to even start thinking about.
We hope this article gave you a better idea of the importance of retirement planning, and the earlier we start, the easier it gets. However, retirement planning can be really intimating with formulas, charts as well as many questions that may not have an answer to you now.
But retirement planning can start as simply as having a saving goal in mind or as straightforward as having yourself safely covered for any accidents or medical costs that may incur in the future.
We know that planning for retirement may be really confusing and "Chim" for some. Do drop us a comment or reach out to us, we are always willing to help and share more with you!
C x D Learning about financial literacy can also be fun and easy ! Stay with us in this financial journey one post at a time to find out how ! If you haven’t already, you can check out our other work down below too, happy learning and reading !
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