Start saving for retirement now

Retirement is not as far away as you think. Studies of the way our brains age indicate that as we age, time actually moves faster. Or at least it does for our brains.

With each passing day, you are getting closer to retirement. Are you ready?

One of the best ways to understand what it takes to retire is to talk to those who are already there. While we like to think of retirement as a time to travel, garden, and have coffee at the local coffee shop every morning, it’s not usually a carefree time.

One study, conducted by Brightwork Partners for Putnam Investments, looked at people who have been retired for two to six years. These retirees are old enough to have traditional pensions, but they are also young enough to have 401(k).

Traditional pensions are fast disappearing, but that doesn’t give today’s retired society an advantage over younger generations.

The average annual income of the new retirees, before taxes, was $36,000. Nearly 50% reported income of less than $25,000, while 25% reported less than $15,000 a year in annual income.

More than half of retirees said their standard of living had dropped since they stopped working. Only 30% said they lived comfortably. Twenty-one percent reported that it is a struggle to make ends meet.

More than 40% of retirees’ annual income came from Social Security. The median income was just 11% of income from savings and investments.

With traditional pensions becoming a thing of the past and social security uncertain for future generations, today’s workers need to start saving now.

Talk to a retiree and you’ll find that retirement doesn’t get any easier as time goes on. More than 60% of retirees say that the longer they are retired, the more difficult it becomes. Many are surprised to find that maintaining a certain standard of living is quite difficult.

Those who are most satisfied with their retirements are those with the highest income and assets. For example, 50% of those with an annual household income of $75,000 are “very satisfied” with retirement.

Most retirees will tell you that they wish they had saved more. Nearly 60% wish they had started saving sooner.

What can you learn?

Start saving now and save as much as you can. Don’t be left with the feeling that retirement could have been better or different. Once the time has passed, it will be too late.

Sit down with your finances and start a plan to save for retirement. It doesn’t matter if you can only pay $25 per month. The point is that you are putting something back. Over time, you may be able to save more. With interest, your savings will grow. And hopefully, you’ll be one of those “very satisfied” retirees.

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