We have been beat over the head with the notion, "Start saving for retirement now if you don't want to work forever.
"You want to enjoy 'those Golden Years.
'This idea has been said over and over from the day you stepped into the working world.
Companies have even decided to 'help' their employees by automatically enrolling them into the company 401K program at the onset of joining the company.
Employees used to have to opt-in to joining the company 401K.
Now, you have to opt-out...
Crazy?That may not necessarily be the case.
Companies understand that people are living longer, healthier lives.
So, as technology gets better and the world gets smaller, tactics and strategies must change as well.
Social Security is touchy subject to some people.
Some feel that it will not exist in about 30 years.
Others feel that it may not have the same impact on families of 'tomorrow' as it does on families of today.
'Has it bothered anyone enough to ask why the government has raised the retirement age to 67.
5? With all of that being said, have you taken into account what everyday living does to your money?Have you thought about how your money can be helped or hindered just by the decisions that we make with money?You can be doing everything right -- saving for retirement, building an emergency fund etc.
- and still end up with the short end of the stick.
How?Why?Look at the enemies of your money and how they will affect you: 1.
Taxes: the BIGGEST debt you will ever have.
Some argue that a mortgage is the biggest debt most people will ever have but so long as you are alive, you will never finish paying Uncle Sam and he takes money for everything - car tax, food tax, property tax, income tax - you get it, right? 2.
Inflation: Let's face it.
The price of products will get more expensive.
In 1976, gas was $.
60 a gallon and a stamp was $.
13.
In 2006, gas was on average $2.
89 (coast to coast) and stamps jumped up to $.
41.
If you do not get the picture yet, we are on schedule for inflation to double prices every 18 years.
3.
Procrastination: the longer you wait, the less time you have to invest and the more money you have to put away.
Below is a chart that shows what it take in ten-year increments to create a $1M nest egg by age 65.
Numbers are based on an 8% yearly return.
Age 25: $389/month Age 35: $817/month Age 45: $1859/month Age 55: $5284/month Age 65: Get used to saying, "Welcome to Wal-Mart!" The numbers are staggering!So, with so many enemies do we have any allies?And the answer is yes!Protection and potential is a very important concept to remember in today's ever-changing world.
The idea behind it is that having your money in a protected product will ensure that you never lose the cash value that you earn while the potential will ensure that you maximize growth.
Take a fixed product like a Certificate of Deposit (CD) for example: it has the safety of the principal that you earn from the bank but the bank is only providing on average about 4% growth on your money.
Inflation is running at about the same rate.
On the other end of the spectrum, you have variable products that have a very strong upside potential but a large risk of capital as well.
So, consider an equity-indexed product (in addition to other retirement vehicles).
This product, like most other products, is driven by the stock market: it has the safety of principal and the upside potential gain.
Depending on the company, cash value gains can be in upwards of 70 - 80% of what the market gains.
We all mean well and we want to live well.
Let's get out and learn what it takes to make our lives worth-while.