There’s an old saying I was once told about the dichotomy of the different stages of life. When you are young, you have time, but no money. When you are in mid-life, you have money, but no time. Finally, once you retire, you have both time and money. I can confirm the first two assessments are absolutely true.
I’m 44 years old with a wife and four kids, and our lives are chaotic. We are now a two paycheck household. My wife has gone back to the workforce full-time for the first time since becoming a mother. My twin daughters play 3 sports. My oldest son is a full-time student and part-time employee at a fast food restaurant. We live in a whirlwind. That’s partly why a bill occasionally doesn’t get paid on time, and dinner is often purchased rather than cooked. I cherish the season of life I’m in. But, I also get excited to think about the stage of life where I can cherish having both time and money. But here’s the hard truth for me and all of you in the same stage of life; if I don’t take the necessary steps now, the old adage will not hold true. The decisions I make today will determine whether I will have a retirement with time and money, or a retirement with just time.
Retirement is coming, whether we prepare for it or not. So, doesn’t it make sense to prepare?
A good start is to contribute to your employer-sponsored retirement plan, if you have one, at least enough to receive the full company match. But that is just a good start. The 21st century retirement is full of new challenges. Only one in 5 Americans have a pension, and more and more companies are offering buy outs of those pensions to get out of the responsibility of funding them.
There is uncertainty surrounding Social Security. It will likely be there for us, but it likely won’t look like it does now. Life expectancy is currently in the upper 70’s in the United States. My generation will likely live longer, but the cost to keep us alive is also going up. Health care costs are rising at about 6% per year. How will you pay for your life when the paycheck stops coming?
A successful retirement lies solely on our own shoulders, and it requires planning. A financial advisor can help you find the right contribution rate and appropriate investments to help you reach your financial goals, the right insurance planning to protect your family, the right plan for debt elimination, and a plan to target a retirement on your terms. But it takes a little time to sit down with an advisor, and there’s another dichotomy. Time is a precious commodity in our stage of life. We don’t get around to important decisions or tasks because we are busy living life. Time is something we will have in retirement. But, if we don’t spend a little time now to plan for our retirement, time is the only thing we’ll have.