Most of our adult life is spent focusing on the work we need to do to provide a life for ourselves and our families. All too often, though, that’s all we end up doing. Too few of us either don’t have to opportunity to prepare for a sound retirement, or we just fail to take the steps needed to address those future needs. Experts suggest that more than half of all American adults have less than $10,000 in retirement funds available right now. When it comes to New Jersey retirement concerns, there’s only one question that needs to be asked: is your planning complete?
Why Retirement Planning Matters
The problem that most of us face is a simple one. We spend our lives working to take care of today’s needs, and it’s not all that hard to simply lose sight of those future retirement needs. Many of us put it off until a later date. Too many simply assume that it will all work out in the end. In the real world, however, there’s only one equation that matters: the savings that we amass during our working years will need to sustain us throughout our retirement. It’s like storing up grain for the winter. At some point, the snows come, the wind blows, and whatever you’ve gathered will just have to see you through until the spring thaw – except in this case, there is no end to the winter.
Now, that’s not intended to sound pessimistic. Like the story of the Ant and the Grasshopper, it merely serves as a reminder that sound planning now can prevent hardship and disappointment later. This is the reason that retirement planning exists. It provides a structured way for us to focus at least some of our attention on storing up some of the fruits of today’s labor so that we can count on that bounty in the future – when labor is often no longer an option.
Is Your Planning Complete?
If you evaluate your own retirement efforts, what do you see? If you’re like most people, you can count on whatever meager allotment you receive from Social Security when you’re old enough to receive it, and perhaps a small retirement account. Again, most of us have very little by way of retirement savings, so if we all retired tomorrow, about half of us would find ourselves almost totally reliant on those government benefits. It’s likely that you expect more from your retirement than that.
In previous generations, Americans could rely on several different sources of retirement income. There was Social Security, of course – fulfilling its intended role as a supplementary income for retirement. Then there were the company pensions. Finally, those retirees could rely on their own personal savings. Yes, many of our parents and grandparents were much more committed to saving than today’s generations of young Americans.
As the culture and workplace changed, the employer-employee partnership that helped to foster the use of company pensions fell to the wayside. Today, most companies offer nothing even remotely resembling those pension plans of yesteryear. Instead, workers need to look to other options, including both employer-sponsored retirement accounts – that employees contribute to, of course – and individual accounts. To have a complete retirement plan, you need to be taking advantage of one of those savings options.
Building Your Retirement Plan
In addition to Social Security, you should be using a retirement account that invests your money wisely so that you can take advantage of the two most important elements of any savings plan: time and compounded interest. If your employer offers a 401 (k) plan, you should be participating and contributing as much as you can. If that employer matches your contributions, then you should work to contribute the maximum amount allowable by law to ensure that you take full advantage of the company’s generosity.
And what if your employer doesn’t offer a retirement plan? In that case, you should create an individual retirement account, or IRA. While you’re not allowed to contribute quite as much to an IRA as you can place into a 401(k) plan, the IRA can still be an invaluable way for you to build a nest egg that will grow over time – providing you with a sizable sum of money to help support you in your retirement years. Of course, if you’re going to be contributing to a retirement account, then we need to address the elephant in the room: the reason why we don’t save.
Focusing on Saving
The fact is that Americans are not as committed to saving for the future as we should be. If we were, then more of us would have enough money saved to finance something more than just one year of retirement. The problem is that you need to be committed to your own retirement effort. You need to figure out how much you’ll need once you retire, and then make changes to your lifestyle to ensure that you can save enough money to fund that effort. The good news is that many of us spend so frivolously that we’re surprised to see how much money we waste away each month.
Of course, many of us need help getting from where we are to where we want to be. It’s never easy to set new goals or change old habits, so we can often benefit from outside assistance to help us take those first few steps down an unfamiliar path. An estate and retirement planning attorney can provide the assistance you need to ensure that your planning is done the right way.
Get the Help You Need for Your Perfect Plan
Your New Jersey retirement planning is too important to leave to chance. Fortunately, the retirement planning and estate plan experts at the Augulis Law Firm can provide you with the advice and help you need to ensure that your planning can meet your long-term goals. We’ll help you craft a new retirement plan, adjust an existing strategy, or aid you in coordinating your plan with your broader estate planning effort. To learn more, contact us at our website, AugulisLawFirm.com, today or give us a call at (908) 222-8803.