This year I will be turning 28. I don't look at 30 as being old at all honestly, but the closer I get, the more I find myself to be thinking about my future.
As many of you already know, I am self-employed through my blogs and freelance writing, which means that my finances and everything that goes with it aren't traditional.
While I have done pretty well so far at saving for taxes and trying to put money aside for additional savings, I honestly have a total of $0 set aside for retirement.
Does Retirement Really Matter?
To me, retirement is important to be prepared for the future.
Even though none of us know what tomorrow may bring and I love my job, I know that I likely don't want to work full-time for the rest of my life even if I continue to love my job for another 30 - 40 years.
Plus things can happen and I may not be able to do my job as I am now.
5 Reasons Why Saving for Retirement Now is Important
1. You can't depend on pensions. If you're self-employed like me, you won't have a pension to depend on most likely.
Plus, as seen many times with the economic downturn, pensions can't always be depended on - if one is even offered anymore - to still be there and can otherwise be eaten into with rising insurance and healthcare costs.
2. You don't want to work your whole life. Whether you love or hate your job now, I think most of us can agree we don't want to work our whole life.
You may have grandkids you want to spend more time with, causes you want to devote more time to, or see more of the world, etc.
As we all know, working a full-time job day in and day out as we get older doesn't leave much time for things like this.
3. The earlier you start saving, the more the total can grow. Did you know that the best time to start saving for retirement is your first job?
That's because the longer your money is in various savings accounts, the more interest it can compound which is a super easy way to "earn" money.
Odds are most of us weren't disciplined enough to start with our first job, so it's important to start asap.
4. People are living longer in retirement. People are living longer thanks to more knowledge and healthier lifestyles.
That means unless you want to work longer, you'll need to have more money set aside to continue living in retirement comfortably.
5. You'll be financially responsible for yourself. We all fall on hard times and need help now and then, but once we are older it is harder, if not impossible, to rebound from.
In case you have health problems where you can't continue to work and provide for yourself, do you really want to pass on your cost of living to family and friends?
Start saving for yourself now and you and your family will be that much happier and stress-free in your golden years.
As I said earlier, I have $0 set aside for my own retirement. Since I don't have the most traditional job ever, it's something I have to really take the time to think about and implement.
Here are 5 tips for saving for retirement that I came up with for myself, but they can also work for you, self-employed or not.
5 Tips for Saving for Retirement:
1. Start putting money aside now. Even if you start with as little as $5 a month, start putting that money aside now.
It eventually adds up over the years and you'll be able to earn that much more interest.
If you aren't self-employed, many companies have 401(k) plans where they will match up to a certain amount of money that you put in.
2. Make a plan for what you want to do in retirement and plan accordingly. Do you want to travel the world, spoil your grandkids, etc. in retirement?
These are all costly things that need to be taken into consideration for saving for retirement in addition to basic living costs.
As much as we don't like thinking about it, try to plan for your healthcare costs too.
See what illnesses you currently have and what your parents experienced as they got older.
Having been a care provider to family myself, I can't stress how important it is to save money for your own health and medications or long-term care that may be needed so you don't pass that burden to your family.
They will be much less stressed and able to spend time with your while they can in return.
3. Don't spend what you save. As we all know, crap happens unexpectedly.
Though it's tough to do, budget for savings separately from your retirement so you don't have to touch that money unless it's absolutely necessary.
It's easy to make plans, but in the real world, things happen when we least need them to sometimes, and the more prepared you are now, the better life you can live later.
4. Work on really reducing your debt now. Going into retirement with thousands left in credit card debt, mortgages or other loans isn't fun.
Make a strict budget to live by to pay off your debts (and save more for retirement). This way when you do retire, you can stretch your money further and perhaps have more budget for entertainment.
5. Speak with a financial advisor. While I could list tips and ideas all day long, I'm not a certified financial expert, but I do recommend speaking with one.
Make sure it's someone with great experience and referrals. Then they can take your current and future needs into consideration and make suggestions tailored to your present and future wants and needs so you can get the most bang for your buck.
Getting ready for retirement can be a scary thing at any age, but when you take a deep breath and plan for it, it doesn't have to be super stressful.