Everyone plans for retirement, right? Wrong! As more and more articles are published on the lack of retirement savings that families have as they approach retirement age, I am reminded over and over again that the importance of retirement planning is not adequately stressed.
Even though my wife and I are still in our mid twenties, we have already started saving for retirement. We have 403(b)’s as well as Roth IRA’s that we max out each month. I don’t say that to brag, but merely to stress how much of a role it plays in our finances. Other peoples just don’t seem to get it, as evidenced by the lack of saving. Thus, I figured it would be valuable for me to expand on the influence that retirement planning has on one’s life. It’s simple enough to say that without planning for retirement, a family will not have enough money to live off of, but that usually doesn’t motivate people to start planning. Instead, let’s jump into the other, less-obvious ways that retirement planning affects your finances.
How Planning for Retirement Changes Your Life
There are many other ways that planning for retirement changes your life. While it will make you more prepared (or should), it also does many other things.
Gives You a Goal
A big part of planning for retirement is giving you a conscious goal for which to shoot. I don’t know about you, but I’m the type of person who is extremely motivated by goals. Give me a goal and I will do everything that I can to reach it. It’s really that simple. People who do not plan, drift through life without any direction.
Being conscious of retirement planning is one step towards affecting your finances. If you are aware of that magic number, you are less likely to spend money that you know should be going into savings and investments. If you haven’t seen the influence of this already, try dedicating at least one evening a month to look at your actual spending and compare it to your goals. If you are meeting your goals, you can continue as normal. I think you will find by keeping in on your mind, you are less likely to throw money away.
You Understand the Needs of Retirement Better
A big area where people fail in retirement preparations is not understanding what type of expenses to expect. They may save money on a consistent basis, but if you are not regularly thinking about it, you will fall short financially. This is why many Americans need advice on how to play catch up in terms of retirement.
To put it simply, retirement planning isn’t about the plan so much as the effect it has on your lifestyle. By being proactive and taking steps to prepare now, you are increasing the odds of being adequately prepared for your retirement. Talk about a huge relief! It really is that simple. There’s no magic formula, but I do know that you have to start planning if you want to see results.