If you have been pondering the question, why you need to invest to be able to retire, just think of the world state of affairs. If you don’t look after your own retirement you could be in for some very lean times. Let’s take a look at the reasons…
Not only do the baby boomers outnumber the younger tax payers the recession has had its mark. Consider the report by The Congressional Budget Office in the US who recently advised that for the first time since it began the Social Security trust fund would be paying out more than it will bring in from taxes during 2010. While political analysts knew that this would happen one day it was anticipated to be at least 2016 when this happened. Although there are said to be plenty of funds from past excesses one wonders how long this will last.
In New Zealand there has long been debate about the disproportion between workers paying taxes and the baby boomers who are reaching retirement. The retirement age in New Zealand has been raised to 65 over recent years to help cut the drain on Government coffers.
In recent times we have seen riots in the streets of France as their retirement age has been lifted from 60 to 62 in an attempt to combat this very same problem. In the UK the forced retirement age of 65 has been scrapped and people now have full employment rights in an attempt to boost Public finances with more people paying taxes for longer.
Whatever way you look at it you need to take care of your own retirement funding as it is impossible to know how long you can rely on Government funded income during retirement. If it’s there it will serve to boost your own investment funds and provide greater security.
The younger you are the better it will be to start planning. Unfortunately when you are young it seems so far in the future that it can be hard to grasp the fact that you are giving up the use of your money for what seems a very distant time. Investing now is to provide for your future income, it is the answer to the unknown of the future.
To my mind retiring is being able to work because you want to and not because you have to. The truth is though that while many of our aged prefer to continue to work there are many who have to in order to make ends meet. Without your own source of income you may be in the same position. Do not depend on social security, company retirement plans, or even an inheritance that may or may not come your way! Take care of your financial future by investing in it today.
It all boils down to the fact that you need to invest to be able to retire.