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Young Workers Must Consider...

3/23/2018 8:12:35 PM by Morgan Wendlandt Edited for Matt Chancey Leave a Comment
Retirement planning is a consideration nearly everyone these days makes during their career. As happy as I am to see more and more people taking control of their retirement future, this responsibility is shifting earlier and earlier in careers. The truth is, the retirement landscape for many of today's young workers will present very different challenges than what retirees face today. These challenges require specific considerations early on in careers. Here are a few of those considerations for young workers in their retirement planning.

1. Increasing Life Expectancy
People are living longer, and while that's great news it also means that there's more to retirement than ever before. Not saving for that could mean being unprepared, and that could mean a much lower quality of life in later years. To have a good quality of life after retirement, younger workers will want to plan for living longer.

2. No Reliance on Social Security
As it stands now, people born in 1980 or later have little chance of seeing the promised benefits of social security, without major changes to the system. Because of that, it is important that people not rely on having social security funds available in retirement. While social security might still be there, that will just act as an added benefit for those who have saved wisely.

3. Significant Changes to Medicare
While Medicare greatly helps people who need medical care in older age, it is not going to be the same in the future. There will likely be many cuts to it, so younger workers should focus on saving more for medical care in retirement than they actually think they will need. If Medicare is still strong at that time, the extra money they have saved can just be used for other things.

4. The Flexibility of Cash Value Life Insurance
Cash value policies that have living benefits can be great ways to continue to save money. They can protect against accidents and disabilities, and they are far less expensive than traditional policies that cover these types of events. That makes them a smarter investment choice.

5. Lifestyle Will Matter When Considering Savings
How a person lives, and how they intend to live in retirement, both matter when thinking about the kinds of savings they want to have. For people who have or want a more extravagant lifestyle, saving additional money to make that happen will be a very important consideration. Thinking about how they want to live when they are older can be hard to imagine, but it is important to have a concept of what matters.

6. Putting Away Small Amounts Can Really Add Up
Younger workers who do not have a lot to save yet may feel as though there is really no point. But even a few dollars here and there can add up to more than would be expected in the future. Start saving early and keep saving, even if it is just a little bit. Over time, that can make a big difference in how much is available for retirement, and can affect the overall quality of life at an older age.

7. Shying Away From Stocks Could Hurt Future Growth
A lot of people are fearful of the stock market because it can have so much volatility. However, the overall trend of the market is still a positive one. By putting money in and leaving it there to work over time, younger workers can increase the value of what they have and improve the quality of their retirement living. There are some wise investments to be made in the stock market, and paying close attention can net significant gains.

8. Long-Term Savings Equals Long-Term Planning
In order to save successfully for a long period of time, it is wise to plan for a long period of time. Short term investments can make good money, but that money should then be rolled into longer term options. Without doing that, a person saving for retirement may find that they really do not have a strategy that is going to benefit them.

This content created by Matt Chancey in conjunction with Fusion Capital Management.

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