Why Saving For Retirement is Essential ?

I love my grandparents. They are amazing people who have experienced a lot in life. They have a huge amount of knowledge and they are always willing to share their thoughts and wisdom with me. What it challenging for me to understand though is why they live the way they do. They live on social security alone and have no other source of income other than assistance from the likes of me and my parents. They have no retirement saved, no pension, and no income generating investments. For people so seemingly wise it is hard to understand how they got to this point in their lives.

Social Security Really ?

They do come from a generation that expected social security to cover their retirement needs. When they were young saving for retirement wasn’t the most obvious thing to do. Not only that but their jobs didn’t provide pension benefits or any kind of retirement allocation. They were basically contract employees for the duration of their careers. They were truck drivers who operated as a team under one paycheck so nto only do they have no retirement savings or income but their social security checks are smaller than what you might expect.

Although this set of circumstances is not necessarily typical for working people today it does illustrate the importance of putting some financial responsibility on your own shoulders. You may think that you will be taken care of in your later life but you never really know what’s going to happen.

These days there are new hindrances to retirement savings. Many people in their early working years don’t believe that they ever will retire. They love their work and don’t see any reason why they would ever stop working. To some extent these people are on to something. If you love what you do then why would you ever need a huge portfolio for the day you stop working; why not just keep doing what you love until the day you die.

The problem with this logic however is that you never know when a set of life circumstances will keep you from doing the work you love. Any person is vulnerable to accidents and we are all susceptible to disease and health ailments. You can be doing the one thing in the world that you would never want to stop doing but if something happens to force you out of your profession and you have no retirement savings then you are going to be stuck between a rock and a hard place. You will have highly advanced skills that are no longer usable and you will have no experience in any field that remains available to you.

In the case of health problems you may not be able to o any work at all. What then? With no savings and little to no ability to work how will you survive?

In some ways retirement savings can be a lot like an insurance policy that can be cashed out at any time for any reason. You may not have disability insurance but if you can’t work for some reason other than disability then you still have money to draw from; your income source does not go away.

Imagine a scenario where you are beyond retirement age and your parents suddenly need full time care. Can you really continue working if you need to tend to them? Sure there are assisted living facilities but a retirement nest egg gives you the freedom and flexibility to chart your own path. You may not feel like you’ll ever want to stop working but when you are 70 you will want to have the option to stop working in case you need it. It’s like having a get-out-of-jail-free card in your pocket. It’s unlikely that you’ll need it but having it is more than worth it. It gives you peace of mind.

My grandparents are amazing people and I love them to death but I wish they had saved for retirement throughout their lifetimes. Their retirement years would be so much more enjoyable for them. As it stands now they don’t get out much, they mostly stay at home, and barely experience life. Their waning years are not being spent enjoying the world they live in – they are simply living each day in the most basic way possible and waiting to do the same the next day.

Start Saving Now !

Retirement savings is a bit like insurance and a bit like freedom. It opens doors of opportunity. Whether you take advantage of those open doors is another point all together but when you get old enough to retire you will want to decide for yourself if it’s actually worth it rather than let circumstances dictate what you can and can’t do with the rest of your life.

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