Retirement Planning is Not Just For More Mature Workers

by | Apr 6, 2021 | Financial Services

A young person today just beginning life as an adult can expect to live for at least another six decades, and that is quite a long time. With life expectancies growing steadily longer over the years, many healthy people will see the age of ninety or more, despite having stopped working decades earlier. As a result of these lengthening lifespans, saving for retirement is more important than ever, because living so long without working will inevitably become expensive. While programs like Social Security and Medicare can help to make things a bit easier, relying solely on what they offer will never be a good idea. Instead, proactive retirement planning will always be the best policy, and the earlier it begins, the better.

This is an especially important point for younger adults to absorb, as failing to do so can prove to be costly later on in life. The single most powerful principle of all regarding saving and investment is that of compounding returns, and that effect only reveals its true significance over longer spans of time. A young person who saves diligently from the very beginning can often expect to retire to savings that exceed by several factors or more those of peers who wait even a decade longer, so being diligent from the beginning can truly be rewarding in the end.

While retirement planning might sometimes seem like a solution in search of a far-off problem for younger people, the fact is that the rewards can be great in just about every case. In addition to the investment-enhancing power that the compounding effect produces over time, young people can also afford to be more aggressive than older ones when it comes to saving, and that can likewise help inflate the size of their returns.

As a result, there are few things that can be more beneficial for a young worker than thinking about retirement and taking appropriate action. While it is always important to enjoy life in the present, keeping an eye on the far-off future can pay off, as well.

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