There are dozens of excuses that people use for not saving for retirement. And they all sound good. In fact, you probably have a few of your own. Rather than add fuel to the fire, in this article, we’ll give you four reasons why you should save for retirement.
These are some of the main reasons why you should save for retirement:
You won’t to have to live with your children just because you can’t afford to live on your own.
If you have children, you probably wouldn’t mind spending as much time with them as you possibly can. But – for the most part – you probably also want that to be at your discretion. Having to live with your children because you don’t have the financial resources to live on your own isn’t how most people want to spend their retirement years – regardless of whether your children feel you are a welcomed responsibility or a burden they simply cannot afford. Being financially dependent not only means depending on someone else to cover your living expenses, but it may also mean giving up your freedom and your independence!
The rainy day
As you get older there are still likely to be things that crop up from time to time: boiler repairs; unexpected maintenance for the car; or repairs to a property as it gets older. So a rainy day fund is important.
Healthy living
Your health will become a priority in your later years. Unfortunately, our levels of health aren’t guaranteed and, unless you have a very comprehensive medical insurance policy in place, it may pay dividends to have savings set aside – just in case you need (or want) prompt private treatment.
Living well
As well as budgeting with a regular income, it also makes sense to plan to have some spare savings that could help fund a lifestyle you’d like. Perhaps treating yourselves occasionally with a meal out, a trip away, or a celebration with family and friends.
4. Saving in a tax-deferred account produces a compound effect on your return-on-investments.
If you add your savings to a regular savings account, the earnings that accrue on those amounts are taxed in the year those amounts are earned. This reduces the amount you have available to reinvest by the amount of taxes you must pay of these amounts.
You don’t want to rely on the welfare system to finance your retirement years.
There’s nothing wrong with relying on the country’s welfare system for financial assistance if you have to.The issue is, do you really want to be in the position where that is your only choice during your retirement years? How would that affect your retirement lifestyle? With the limitations that you would face with such limited financial resources, you run the risk of barely being able to afford the basic necessities.
