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There’s good news and bad news for most Americans, that bear equal discussion, as retirement, like most everything in life, goes a lot smoother if it’s planned beforehand. The Bad News If you’re in your 30s or younger, here’s something you probably already know: you can’t count on Social Security benefits. If you’re in your 40s or older, chances are you’ll receive them, but don’t count on the level of benefits being paid now. Either way, you should plan on retiring without them, because there’s no telling how much (if anything) you’ll receive. With that in mind, consider that over 50% of American workers have less than $25,000 saved towards their retirement. If they’re lucky, that might last them a year of retired living. Retirement planners say that we should expect to live for 25 years of retirement, which might seem like a lot, but it would certainly be a bummer to only plan for 10 years of retirement, only to keep on living as a penniless leech living with your grown children and grandchildren. Scared yet? Fear not, the good news is actually pretty hope-inducing. The Good News According to a 2008 study of retirement finances across America, a full 74% of Americans do reach their wealth goals by retirement, allowing them to continue to lead the standard of life that they intended. What many economists have found is that workers in their 20s and 30s are preoccupied with finding a mate, establishing their careers, either buying or signing a long term lease agreement on a home fit for raising children, and the big one: actually raising those children. As a result, they either don’t save for retirement, or they save and invest very little. However, as workers approach the latter 40s and 50s, their incomes have grown drastically, while their consumption and spending have declined, freeing up greater amounts for savings and investment. It is in this period when workers devote the greatest amount of resources towards retirement. And once people actually retire, their expenses really drop. With no children, no employment tax, no budget going towards savings, smaller debt, and no work-related expenses (clothes, commute, multiple vehicles, equipment, etc), retirees have drastically lower expenses. Statistically, only one area of spending increases for retirees, and that’s health care; all other expenses decrease. In fact, between ages 64-75, the average person’s spending drops by 46%. As a final note, it’s worth mentioning that the most successful young retirees (40-59) retire based not on savings and traditional retirement accounts, but rather on income-generating investments, such as starting an entrepreneurial company or investing in lease agreement-friendly real estate. These investors and entrepreneurs create a source of income that will continue bringing in money for them long after they themselves have retired and ceased working. If retiring young is your goal, and you accept a modicum of risk, consider starting your own business or becoming a landlord and signing a few lease agreements in rental-friendly neighborhoods. Retirement does require planning, but if you’re 35 and haven’t started investing for retirement yet, don’t lose sleep just yet. Spend frugally, find strong retirement investments, look for income-generating investments, and sit down with a reputable retirement advisor to create a game plan and stick with it.
Article Source: http://www.bharatbhasha.net Article Url: http://www.bharatbhasha.net/finance-and-business.php/325205 Article Added on Friday, September 30, 2011 LD
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