If you are young now, you’ve probably heard financial analysts like Dawn Bennett talking about the many reasons to plan ahead for retirement. The realities are scary: a great deal of new growth is in low-paying jobs like retail, and many of those employers don’t offer full time or benefits to most employees, forcing them to work multiple jobs to make ends meet. Because of this, and the increasing cost of living, many twenty-somethings are still living with their parents as a matter of practicality. These facts are unattractive at least, and frightening at most. Here are some of the factors that make planning ahead for retirement an absolute necessity in today’s economic climate:
Interest Rates Aren’t Rising
We have a lot of debt as a country, something that most people are aware of. Increasing the amount we owe by raising interest rates seems like a bad idea in that context; however, it may be necessary to combat our increasing debt levels. Essentially, we have to pay off the money at some point, but since we have made very few inroads in that regard and simply keep raising the debt ceiling, Americans will continue to see higher costs of living. With most jobs unwilling or unable to provide the kinds of wages that will support people in this climate, the middle class will continue to disappear and the poor will get poorer. Every penny that you can put aside for retirement now is an investment in your future comfort.
Retirement Age is Rising
Since people aren’t able to save as much early on and pensions are being cut, many seniors are working well past the traditional retirement age so that they can afford to live. While there are still some who can retire at 65, for most people that just isn’t the reality anymore. In addition, the technical age at which you can receive full social security benefits is rising to 67 for people born after 1960. And there have been predictions that it will rise even higher for newer generations. This is a disturbing idea, especially for younger people, so it’s important to start putting away money now and making investments to ensure that you have something to fall back on when you are older.
Social Security is a Safety Net – and It’s Being Threatened
There are several politicians out there who would like nothing better than to get rid of social security entirely. Why? Well, it depends on who you are talking about but, in many cases, the argument is that the money could be used to help pay off our debt and bolster other areas of government spending. The problem with this notion is that social security isn’t really big enough to make a dent in our national debt. But it would look good to some people – until they retired, that is. While it’s unlikely that the system would or could be taken out of commission entirely (as doing so would put a lot of people on the street), it’s not a bad idea to have a contingency plan in case the program sees drastic cuts.