When it comes to retirement, our parents and their parents probably were better equipped and knowledgeable about what they wanted to accomplish than most are today. They were focused on it because there weren’t the tools available to them that are available for many of us today.
I thought it might be fun to take a look at some of these basics when it comes to retirement planning and refresh our memory that some of these are just as (if not more) relevant today as they were for our elders.
- Start Saving early…this is something many people don’t realize is one of the most powerful lessons we can still learn today. The power of “compounding” is something many underestimate but can lead to fortunes if you start early enough.
- Keep Saving for your lifetime…this is as equally important as starting early. Learning to put the money away consistently, year after year is one of the most powerful ways to save for retirement. It is amazing how little you have to start with and continue to deposit to leverage this power of compounding into a small (or large) fortune.
- When available, choose a pension…some companies today (especially government and large commercial corporations) still offer pension plans for their employees. If they are available, figure out what they are, stay the course to qualify, and reap the rewards in your later years.
- Plan for health care…we all know bad things happen when it comes to health. Putting some money away for this purpose in advance of something happening beyond your insurance coverage is a good idea. A Health Savings Plan may be a good option to help with formal savings.
- Plan for college…with many public colleges using the GET program today, it is a smart way to be able to save for college for your kids early and save some money on tuition costs. There are variable levels so you can get started small and add along the way.
- Plan for your own retirement…with the introduction of 401(k) and IRA there are many other alternatives to help you save for your future. These are especially helpful when you don’t have a pension plan from your place of work.
The bottom line is to start early and stay consistent. With all the options available today, we can learn from our grandparents and use some of the key principles that got them through some rough times. The principles haven’t changed, just the ways to make it happen and the tools.
