Why you should plan to plan ahead for retirement. - Deepstash

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5 Reasons Why Retirement Planning Is Important

Why you should plan to plan ahead for retirement.

Why you should plan to plan ahead for retirement.
  • Getting stuck in the savings mindset. Saving should be formed as a habit. The amount saved can be increased over time.
  • Medical emergencies. With increasing age comes more health problems. Medical claims might not always suffice.
  • Inflation needs to be taken into account.
  • No state-sponsored pension plan. Not all countries have state pensions or social security benefits.
  • Fragmentation of nuclear families.  With fewer children per family, retirement should be planned without help from your family.

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5 Reasons Why Retirement Planning Is Important

5 Reasons Why Retirement Planning Is Important

https://sg.theasianparent.com/5-reasons-why-is-retirement-planning-important/

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Uncertainty of Social Security and Pension Benefits
  • The aging population is causing fewer contributors.
  • More people are retiring due to increased longevity.
  • Corporate col...
Unforeseen Medical Expenses

Old age typically brings medical problems and increased healthcare expenses.

Living out your retirement years in comfort while also covering your medical expenses may turn out to be a burden too large to bear.

Estate Planning

Without a well-planned retirement nest egg, you may be forced to liquidate your assets in order to cover your expenses during your retirement years.

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Early Mistakes, Late Start & Future Hurdles.

Savings and investments should be part of a monthly budget even when young or just starting a career.

You cannot save enough if you are waiting until your late 30's before...

Myth vs. Reality in Retirement Planning
  • I’m not that old:  It’s not about NOW but saving for your old days when you can no longer work full time. 
  • I’ll wait for a lump sum is just an excuse to postpone planning or procrastinate.
  • Assumed Family/External Support: It’s better to be prepared for eventualities and have contingency funds in hand.
  • Financial Requirements Decrease: Medical costs increase with age. Inflation and other factors might also come into play.
  • I will not live that long or I won’t retire: People tend to live longer, but they will suffer from medical ailments.
Retirement Goals

To have a secure and financially independent retired life during your golden years with regular post retirement income, a corpus of savings/investments and a safe shelter or home.

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The State-run “social security” programs ...
The State-run “social security” programs ...
... violate your rights to plan your retirement. Your Social Security taxes pay benefits for today’s recipients, and theoretically, tomorrow’s workers’ taxes will pay for your benefits. 
Considerations against a Statist model Retirement plan.
  • You do not choose whether to participate.
  • You have no say in how the money is to be invested. Even modestly performing mutual funds yield higher returns.
  • You cannot withdraw in response to poor performance and pursue a highly effective one.
  • Government insolvency is a big concern.
  • Decrease or removes the need to learn prudential savings and investment habits. The average worker cannot readily afford to pay into both the government and a private retirement plan.
Social Security as Entitlement Program

The current system is an entitlement program in which everyone gets to claim a retirement pension from the state (that is, from working taxpayers), regardless of whether they’ve been industrious and thrifty. 

You are not saving for your retirement at all; you are paying for the retirement of others, and hoping that later on someone else will pay for yours and that someone will manage this system efficiently.

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