Over the last decade, I have been particularly concerned about the looming specter of uncertainty that has clouded the minds of workers who are on the verge of retirement. Having retired some seven years ago, I understand the plight of workers who will soon retire. As you get older in any profession, saving for retirement will undoubtedly become more pressing because you have less time to hit your targets as you age.
Having worked as a financial advisor during the early days of my career, I was always alive to the fact that a time would come when I would retire. I also wished to retire sooner to share some moments with my family. This meant that I had to apply the tips I shared with some of my clients, such as investing early and saving for retirement. Looking back, I can say I had enough for retirement, but something inside tells me that I could have done better.
Looking at my elderly neighbor and some of my past clients, I understand that not saving for retirement comes with some consequences. This is not to say that not saving spells for disaster, but it undoubtedly kills dreams. Think about it, someone who wanted to tour the world after retirement could be forced to sit at home as others enjoy their lives.
It is your time to invest in your retirement, and time is not on your side. If you need more convincing to boost your retirement savings today, here is what will happen when you fail to save enough.
Just like my elderly neighbor who works part-time, not contributing to your retirement account means that you will be forced to work when you should have retired. I remember a client I worked with during my early years, Jesse. He had a booming construction business but enjoyed life with a big spoon. I kept telling him, “Jesse, you need to curb your spending.” But he insisted that the business would take of everything. Then came the economic meltdown. Today, in his late 60s, Jesse has taken on a full-time job when he should have been looking at his retirement options.
Saving for retirement is not just about your welfare but that of your dependants. Looking at George’s life, a friend who ran a family business, his entire family looked up to him. George decided to retire, just like most of his peers. He decided to sell the business and live on the proceeds. Unfortunately, a few years later, he suffered a stroke. The money he received from the sale could not support his wife, Virginia. Though his two sons sustained the family at times, Virginia greatly suffered emotional and financial stress after George became incapacitated.
Looking at George’s life in the previous section, you will see that the widow was forced to rely on her kids. As much as they might be comfortable footing your bills and supporting your lifestyle, this decision will undoubtedly leave an indelible mark on their financial lives. And when things get tough, as they have been during the COVID-19 pandemic, such financial stresses can cause resentment in the family. There are no guarantees as far as getting help from kids is concerned since not everyone is lucky.
Not having enough money during your retirement could force you to trade your mansion for a tiny apartment. I have seen many people sell houses they lived in for decades. While some resort to selling for real reasons, a sizeable number do this because they have to live with the consequences of not saving for their retirement enough.
Unless you plan for your retirement, getting by in old age can be a real struggle. At the very least, not saving enough for retirement will force you to work longer or make serious lifestyle adjustments to get by. And who wants to live such a life when they should be enjoying their golden years? It does not have to be this way. Instead of enjoying life when you still have the energy, you should get serious about your retirement.
I understand that some people are usually hindered by fear of making the wrong move. If you are not sure how to save for your retirement, talk to a financial advisor to find out what you need to do to outlive your money.