Utah is just as popular to the baby boomers as it is among the millennials. According to Kem C. Gardner Policy Institute, its population of people 75 years old and above will increase by 60% from 2020 to 2030. The question is how many of these are ready to retire? If you’re one of those who struggle to do it, it could be because you believe in these myths:
When You’re Over 50, You’re Done
It’s true that having no savings of any kind when you’re over 50 should send you the shivers. Experts advise putting at least 10% of your income to retirement, and you must begin as early as you can. The ideal age: 25 years old.
But being 25 years too late doesn’t mean it’s already endgame for you. You just need to be more aggressive and strategic on where you put your money. This is the best time to receive some financial management in West Jordan.
Professional and certified financial advisors can tell you where to invest your hard-earned income to make it grow as fast as possible given the limited period. You can also better understand your retirement goals.
It’s Okay—You Have Emergency Funds
An emergency fund is not a retirement savings account or a pension plan. It’s not for education, travel, or mortgage. You need to have separate and defined accounts for each of these big-ticket items.
An emergency fund is money you set aside in case of an emergency. It means you have no other financial means to pay your nagging debt or that car trouble. As long as you’re living, you need to have this fund alongside your retirement savings account.
Usually, it should be equivalent to 3 to 6 months of your expenses, but if you start late, then it’s fine. You can begin with a month’s worth and increase as you go along. Consistency is the key.
Pensions and Retirement Savings Are the Same
People also tend to confuse pension plans and retirement savings account, and that’s understandable. They have the same goal, which is to ensure you have money once you decide to leave the workforce or get old.
But they’re not the same. Pension plans are always employer-related. They represent the contributions your company put on your retirement. If you choose to leave your work now, then their contribution stops. It begins again if you get lucky to work in another business that provides one.
A retirement savings account is your contribution to your sunset years. It doesn’t matter if you change jobs or move to another state. As long as you fund it, then it continues. Some of the most popular options are the individual retirement savings account such as Traditional and Roth IRA.
No Worries, I Have Healthcare
Healthcare is just one of your expenses as you grow older. In fact, it’s not the biggest spending you’ll have. It’s still housing, especially if you decide to age in place. You may already be over with paying your mortgage at your retirement age, but you still need to spend on its maintenance, utilities, and taxes.
You might no longer have to take care of payroll taxes, but you are still responsible for paying those of your Social Security benefits and earnings from your investment, among others.
When you’re old and don’t have enough money, you become a liability not only to your family but also to your community and, most of all, to yourself. Do yourself a favor and take care of your old age needs as early as you can. Begin by changing your mindset and breaking these myths.