Remember the good ol’ days in college where you’d stay up to pull an all-nighter, drink 15 cups of coffee* and type in a frenzied haze of caffeine?
Then after you stalk a Kinko’s (printing shop) that opens at 7 a.m. to print your ‘masterpiece’, you vow, bleary-eyed to NEVER DO THAT AGAIN?
*Tea, in my case. Coffee is far too strong for me.
Not planning for retirement (the sooner the better!) is exactly like that.
Imagine this scenario…
If I don’t plan for retirement, I am going to have to haul ass and scramble at the age of 40 (maybe later, if I wasn’t as foresighted) to make up that $1 million I’m going to need to retire comfortably.
I’d be looking at my retirement portfolio, wondering why I only have $250,000 in there because I actually need $50,000 a year to live (factoring inflation into the mix).
That means that my $250,000 which is a fortune, is only 5 years of comfortable retirement!
If I lived 35 years beyond the age of 65, I’d need $1.75 million. *choke*
Cue the “cram session”, where I frantically learn how to budget, cut back on my living expenses, learn how to be “frugal”, crunch numbers all day, stress, worry, get more white hairs (or have them fall out of my head), and live on the strictest budget I’d ever lived on.
Beans and potatoes.
Unfortunately, this is reality for many people! I read that the average retirement portfolio in Canada in 2005 was only going to yield $17,000 a year.
$17,000 a year.
This is why I’m saving for retirement
Not that you needed any more convincing or fear mongering, but the above scenario is exactly why I’m thinking about saving my money and saving for retirement.
If I didn’t plan for my retirement, I’d be scrambling at the last minute to make it work, wishing that I had been smarter in my 20s and 30s to save for my future.