Importance of a Retirement Plan
Sept. 13, 2013
From a personal and financial perspective, retirement is an important milestone in life. For most of us, realizing a comfortable retirement where we don't have to pinch pennies is an incredibly extensive process that requires sensible planning and many years of diligent persistence. Once you reach retirement age, managing your retirement funds is an ongoing process that will extend well into your golden years.
All of us want to retire comfortably and we don't want to have to rely on our Social Security benefits alone; therefore, the complexity and time required in building a successful retirement plan seem like a daunting process. However, with the proper assistance from the Harris Law Offices, it can be accomplished with fewer headaches than you might have anticipated. A good retirement plan will take require an attainable investment plan and a long-term commitment.
There are many important reasons why everyone should plan for retirement. First of all, there is a great deal of uncertainty about Social Security and pension benefits. As our developed population continues to age, there are fewer working-age people actually contributing to the social security system and a similar situation exists with other pension systems. There are greater burdens being placed on the pension system as more people are living longer than ever before due to advances in health care. This effect is placing significant strains on the system to the point where governments are finding no other viable option but to reduce or suspend social security benefits for all but the poorest of the poor.
Private pension plans are not immune to vulnerabilities either. Economic weakness and corporate collapses such as the high-profile Enron bankruptcy can cause employer-sponsored stock holdings to be wiped out in an instant. Despite the fact that failure of the social security system may not occur any time soon, essentially, planning for your retirement with funds you cannot control is not a viable option. Even if the risks don't come into fruition during your lifetime, it's important to realize that your Social Security benefits will never provide you with a comfortable retirement.
Social Security is intended to provide a bare minimum standard of living during old age, and without having your own savings added into the mix, you will find it difficult, if not nearly impossible to enjoy the same standard of living that you enjoyed while you were working. This situation can take a turn for the worse and become alarming if your health deteriorates rapidly. To prevent having an unforeseen illness wipe out your savings, you may want to consider obtaining both medical and long-term care insurance to cover health costs that may arise.
If you're married or have a family, your retirement strategy may include contributing to your children or your grandchildren's lives, whether it's through financing education, passing down your nest egg, or passing down land or real estate within the family. Without a well-planned nest egg, you could be forced to liquidate your assets to pay for medical expenses or nursing home care during your retirement years. Such expenses could prevent you from leaving anything behind for your spouse or your children, or worse, you could become a financial burden on your family as you age.
Regardless of the financial challenges that you stand to encounter, a secure retirement and estate plan will do wonders for helping you and your loved ones cope. There is much to be said about having a sizeable nest egg in place to provide for you and your loved ones.