When you think of the biggest purchases you’ll make in your life, your house probably comes to mind first, right? After all, once you pay it off, you will have probably dropped $150,000, $200,000 or maybe more. But there’s an even bigger “purchase” you’re going to be making in the future: your retirement.
Think of it this way: every month, when you’re saving money (or as we like to say at Simply Money Advisors, when you’re setting aside your monthly “profit”), you’re actually pre-paying for your retirement. Because that’s really what your long-term investments and saving are serving as: a monthly “installment” program to fund your future. So then the question becomes, what kind of retirement do you want to buy when the time comes?
Imagine you’re going into a store. As you walk in, you see shelf after shelf lined with all different varieties of retirement lifestyles packaged up, all with different price tags. As you browse, you pick up one package and notice it’s going for a current savings rate of $200 a month. But it will only buy you the “bare bones” version of a future retirement – food, shelter, basic entertainment. Eh. That could work for some people, but not you. Then, your eye catches another package that’s an upgraded version. You pick it up. This one includes the perk of two vacations a year that’s going for a current savings rate of $1,000 a month. Oh, that sounds nice! But are you saving enough now to be able to afford that more expensive package?
The Simply Money Point
In this day and age, delayed gratification is really hard. We get it. That’s why saving now for a future that's 20, 30, 40 years away can be so difficult. But to have the retirement you really want (and everyone is different), it’s up to you to decide now what kind you want to buy, and to set aside the appropriate monthly installment payments in the form of savings.
For help figuring out if you’re on track for retirement, we invite you to speak with our team at Simply Money Advisors.