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Should You Be Saving for Retirement?

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by Enlighten Financial Service

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10.26.2021

Retirement planning can be tricky, especially if you’re not sure what you should be saving up for. Should you save enough to take care of yourself? Your spouse? Your kids? Or should you make sure your money will last as long as possible so that your descendants can enjoy the fruits of your labour after you’re gone? This guide on retirement planning will help you decide whether to start saving for retirement, and how much to put away each month, based on your current situation and financial needs.

1) Why should you save for retirement

The earlier you start saving, the more options you have later on. If you wait to save, not only will it take longer to accumulate enough savings to last throughout your retirement, but you’ll also have fewer investment options available. The longer your money sits in one place, the less likely it is that it will continue growing at a steady pace—especially after inflation eats away at its value. So if you haven’t started saving yet, don’t hesitate any longer. Start today!

2) When should you start saving

If you’re like most people, you probably aren’t exactly flush with cash. This is especially true if you’re still in school or are just starting your career. As such, it might seem like retirement is something that belongs to another lifetime—and it does, but there are ways to start saving now without throwing yourself into poverty. The sooner you start saving for retirement, the more time your money will have to grow and compound on itself.

3) What are your sources of income

Your salary is probably your most consistent source of income, but if you work as a freelancer or an independent contractor, you may not get paid regularly. This can be a major source of stress—not to mention added expense: Because your money isn’t coming in regularly, you’ll need to cover extra costs like health insurance and additional travel arrangements during times when you aren’t working. Save yourself some time and hassle by making sure you have enough savings on hand to pay for these sorts of expenses while still leaving room in your budget for everyday needs. Keep in mind that job security doesn’t necessarily mean having one job; it might mean having three part-time jobs! To make things easier on yourself, spend some time investigating your options, either by creating a side hustle from scratch or supplementing what you currently do with another part-time gig.

4) When should you stop working

There’s no definite answer to that question, and obviously your decision will depend on many factors, including: what you like to do; whether you like working; and how much money you need (and want) to spend. Having a retirement plan in place can help ease some of these anxieties. Many people use their annual or semi-annual bonuses as a time to take stock of their progress toward retirement goals. If you have a job that provides a superannuation/pension at retirement, consider using it as an opportunity to start putting more money away each month – whatever amount is not put into your Superannuation/ Pension fund may go into building your own savings account. You might also think about whether there are ways to reduce your expenses now that you’re nearing retirement age; if so, those savings could be invested over time as well.

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