Retirement Planning – It’s Never Too Early To Start

Retirement seems so far off for many of us that we do not give it much thought, except for the times we have a really lousy day at work! With so many people worrying about their current day-to-day circumstances, it is difficult for many to imagine retirement planning so far into the future. Statistics show that over half of millennials have saved zero dollars for their retirement years. With many people of that generation struggling to make ends meet, retirement planning may seem like a pipe dream.

Sadly, this problem is not unique to younger workers. Estimates also show that half of Americans 55 and older have not saved anything either.  Despite your current age and circumstances, you probably know someone who is approaching retirement or in retirement that is struggling to make ends meet. After a lifetime of working, it is truly frustrating to see so many individuals struggle financially in what should be their golden years. With the current economic trends, it is never too early to start retirement planning.

Retirement Planning

Retirement Planning – The Good Old Days Are Gone

There has been a huge shift in the culture and commitment for retirement savings. In prior decades, there was more cooperation between companies and workers to ensure that they would be taken care of in retirement. Many people worked in an environment where they contributed to a pension fund.  The pension provides an annuity with a regular payout in retirement. Companies and workers would share the burden. It was virtually a guarantee that employees would not have to struggle upon reaching retirement age.

In recent times, the situation is quite different. Despite paying into pension systems for their entire careers, some have seen their benefits eliminated or sharply reduced. Companies that are household names declare bankruptcy on a regular basis. Sadly, their pension funds with billions of dollars in debt have been a failure with them.

Other pension funds are the victims of criminal activity.  This takes place all while workers continue to contribute their hard earned portion. Some people well into retirement have had their benefits cut in half overnight, leaving them wondering how they will get by. I know several ex-truck drivers who are 70 years of age and up. They have been victims of having their pension benefits cut significantly. Without any recourse, many have no choice but to return to the work force.

Retirement Planning – A Detroit Story

Being a child of Detroit, most of my family and friends work for the “Big Three” automotive companies – GM, Ford, and Chrysler. The vast majority of my parents’ and grandparents’ generation made it a goal to get a job with one of them. It meant a good salary, great healthcare, and a strong pension.

Whether people worked on the assembly line or had a white collar job, they could enjoy a long career and a good standard of living for their family.
They may have had to endure the occasional lay off or slow down based on the economy. However, it was rare for them to worry about their job disappearing. Many people could afford a nice home and have a cabin in northern Michigan. They could afford boating and other hobbies, plus ensure their kids were educated and well taken care of.

As times changed, and the manufacturing sector of the economy began to disappear in the USA, those opportunities began to get fewer and fewer. Companies went through huge cutbacks and eliminated thousands of jobs. Manufacturing jobs are now in Mexico, China, and other regions for a fraction of the cost. The bottom line and the stock price became much more important than preserving jobs and minimizing the impact on the company workforce.

Workers had to assume much more of the cost when it came to health care and retirement. Many pension funds were restructured or eliminated due to being financially insolvent. People who were well into a career that began with certain expectations were hit with some harsh realities. The automotive industry is certainly not the only example. This situation has affected people around the country of all walks of life.

Retirement Planning – You Are On Your Own

It is important to understand the urgency with this situation. You must figure out what steps you need to take to protect yourself. As human beings, it is difficult to think about and deal with something so far off in the future. There are so many unknowns in life that we do not even know what tomorrow might bring. Despite that, you have to recognize that life moves pretty fast. Time sneaks up on you as you grow older.

Talk to someone who is a few years older. I bet they often wonder where the time has gone. I know I do that quite a bit! It was not until I was into my late 20’s before I got serious about saving and getting my financial house in order. The tough lessons I learned from my friends and families made a mark. There are no guarantees in life.  so you have to do all you can to prepare for a successful future and plan accordingly.

With the changes we have seen across the economic landscape, the trend is for people to be on their own when it comes to retirement savings. There are several factors in addition to the absence of company provided plans. One positive factor is that people are living longer. Years ago, people were ecstatic to maintain health and vitality past the age of 70. Now, we see more and more people living well into their 80’s and 90’s.

Retirement Planning – Expect To Live Longer Than Your Predecessors!

Estimates now say that a quarter of 65 year old individuals will live past the age of 90. Existing plans are having to care for people much longer and many of those seniors will need long-term care. Even if you are able to contribute as a newer employee, this puts the burden on younger members of the system, who have to pay more to receive less and less. Those systems include government programs such as Medicare, Medicaid, and Social Security.

Do not expect the government to be there for you in the future. You do not have to get caught up in the doom and gloom, but do not be overconfident that those institutions will look the same by the time you are ready to use them. With a lifespan that may go much longer than your predecessors, you have to give it careful thought.

I recommend that you perform a thorough financial inventory. It is important to see where you are at right now. Download your copy of the free Financial Fitness Checklist. It will provide you some important guidelines to review and consider. Make sure you take control of your financial future. It may be more difficult to perform retirement planning now, but it is more important than ever. You can still succeed with money and enjoy a bright future!

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