An average American has less than $5,000 saved for retirement. And that sum would likely cover only a month or two expenditures. Whether you prefer investing in gold or silver, saving now for your retirement is essential. Listed below are just a few reasons why you have to start preparing for retirement today.
Social Security is Not a Sure Thing
The average monthly Social Security benefit is about $1,400. It may not be enough to cover monthly expenses and ensure a retirement. But even more importantly, social security isn’t a sure bet. By 2034, all of the money in the program’s reserves could be depleted, which means the government may want to cut benefits for future retirees by 21%. Social Security helps provide extra income for older and middle-aged Americans.
But on the other hand, a separate retirement income could help bolster your financial security, whether it’s from an employer-sponsored 401(k) or an individual retirement account (IRA).
You Could Avoid Large Contributions
Someone who leads in 30 years could probably collect more retirement income than another retiree who doesn’t start making ordinary gifts until a decade before planning for retirement. You can grow your retirement accounts quickly by making large catch-up gifts. Starting in 2019, you can contribute about $1,000 in catch-up gifts to a traditional IRA or Roth IRA. But for many, it will likely be easier to put a smaller amount in over a few decades than to have to recover in a short period. Compound interest plays a role here, too, because the faster you contribute, the longer the time for any expansion.
You Can Retire Comfortably
No one wants to have a struggle in retirement. If your goal is to retire at 65, you may not have the ability to handle it, so your only options may be to continue working or rethink the retirement lifestyle you’ve envisioned. If you start early, you’ll have the ability to build a retirement plan, which means you’ll have more options and more flexibility in retirement. But whether you’re 25, 38, or 52, you can help bring closer to realizing this goal and safeguarding your financial future.