Television ads assure us that we are never too old to begin saving for retirement. That makes sense; even a little financial padding is better than none. Pundits, however, are now saying the best time to start retirement strategies is when we are between 35 and 50 years old.
The reason is simple: People in that age range have usually paid back student loans and are established in their careers. They are probably making respectable incomes and have more disposable money. They own more assets than they did when they were younger. At the same time, though, they are still young enough to take advantage of compounding benefits.
Of course, people in this age group may have accumulated debt as well. They are dealing with issues like how to finance their children’s education and possibly help elderly parents. In addition, employment retirement plans are moving from benefit-based to employee contribution-based. Social Security is certainly not secure, and it becomes obvious that people are going to have to be responsible for much of their retirement income. If these years are indeed the best years to begin investing for retirement, there are many questions that must be answered. Is it a better choice to help our children pay for their educations or to use the money to fund our own retirements? Should we invest in long-term care insurance for our parents if they cannot afford it?
Another question concerns restructuring debt. Does it make sense to restructure in order to be able to invest? The answer depends upon individual circumstances; restructuring could result in paying more interest. Should you borrow to get the funds to invest? How much money should you be contributing to superannuation as opposed to a separate investment portfolio?
Most people are not financially savvy enough to answer these questions for themselves. Sometimes, considering the financial future, people panic and begin setting aside clumps of money they need in their daily lives. There has to be a balance; individuals should have a plan to systematically put away what they can afford. If you have questions or concerns about your investments or retirement planning, visit your local Nationwide insurance agent. Together, you can map out a plan to make working beyond retirement optional, not mandatory.
* Disclosure of Material Connection: This is a “sponsored post.” The company who sponsored it compensated me via a cash payment, gift, or something else of value to write it. Regardless, I only recommend products or services I believe will be good for my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”