Are You Sure You Can Afford to Retire


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At what age people plan to retire varies based on individual goals and priorities. Recent research report that 50% of Americans want to retire before the age of 65, 30% of people want to retire at age 65, and 20% of people just don't know. Where do you fit into those numbers? Do you know if you can afford to retire and when? Individuals are free to retire anytime they want. However, there are common reasons which inspire people to want to retire. People often choose to retire because their employer is downsizing and has given them a great incentive package to retire early. Some people have, simply, put in enough time and earned enough pension credits after working 30 or 35 years. Many individuals choose to retire because they are just sick of the daily grind. Very few people actually retired because they have planned for their retirement and can afford to retire.

The world has changed in the last thirty years. People used to start families when they were 20, work until they were 65 and live until they were 72. There was plenty of time to work, earn, save, and have a few happy years to enjoy the fruits of their labor. While the retirement age, for social security, has stayed the same, everything else has changed. People begin work later, at age 25, because of school and post secondary education. People do want to retire early and the goal for most people is to retire by age 55. That is great in theory but most people can not afford to retire at that age. Most women retired at the age of 58 and most men at the age of 62. Life expectancy has also changed. Now the average person lives until they are 80. That is seven more years of retirement that you need to plan into your retirement fund.

Most people can not afford to completely retire and the newest trend is to keep working, part time, after retirement to supplement their retirement fund. A recent poll reports that a least 40% of retired people work after they have officially retired. Money is only one reasons retirees return to work. Another common reason is to help fight out off boredom and depression. The change from working all day, everyday, to not working at all can be a hard adjustment.

If you want to retire at the age of 55 you need to set specific financial goals and aggressively pursue them as soon as possible. Even if you did not begin to save and invest in your 30s, it is never too late to start. Below are some good tips to help you afford to retire. Make sure you set aside as much money as you can for the future. Financial experts suggest that if you want to retire early you will need to save about 25% of your gross income. The later you start the more you need to save. To earn a higher rate of return on your money you will have to invest in securities that have higher risks. The lower the return the more money you will need to save. Live modestly while you are working. The more you save and invest, the earlier you will be able to afford to retire. They key is to understand how to make it happen. Take control now by planning and understanding what is needed to achieve your dreams.

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