If you are still in the early part of your working years, the thought of spending time and energy on retirement planning may seem silly to you. After all, you just started your actual career so why would you need to be thinking about retirement already? The reality though, is that unless you start thinking about, and planning for, your retirement years now there is a good chance you will suffer later. To avoid that possibility, you should discuss incorporating a retirement planning component into your comprehensive estate plan with your Illinois estate planning attorney.
Why Is It Important to Plan for Retirement?
When you are in your 20s and 30s it is very difficult to imagine what life will be like when you reach retirement age; however, in order to understand the need to plan ahead, you need to have some idea of the challenges you may face as a retiree. One of the most common challenges retirees face is having the financial stability to truly enjoy their “Golden Years.” Gone are the days when a worker can count on lifetime employment that comes with an employer sponsored pension plan. Moreover, today’s younger workforce may not be able to count on Social Security to supplement their retirement income as the fate of the federal retirement program is less than clear at this point. Even if Social Security is still around, don’t expect your monthly benefit to cover all of your expenses. That means that if you don’t start saving for your own retirement, you will spend your retirement years worried about money and watching every penny. On the other hand, if you do start planning while still in your 20s by saving just $2,000 a year for the next 40 years, you will be able to put away around $560,000 (assuming earnings grow at 8 percent annually). If, however, you wait an extra ten years to start saving money, you end up with only $245,000 when you retire at age 65! By waiting, you lose over half of the money!
Money Isn’t Everything
While ensuring that you have the financial means to survive your retirement years is certainly an important aspect of retirement planning, it isn’t everything. There are other aspects of your retirement years that you also need to consider as well. For example, you should think about the likelihood that you will one day need long-term care. When you reach age 65, you will stand a 50-50 chance of one day needing long-term care. If you make it to age 85, those odds jump to a 75 percent chance. Money, once again, becomes an issue because the cost of that care will be high. Unless you can afford to pay out of pocket, you may end up needing to qualify for Medicaid to help with your long-term care expenses. If you failed to plan ahead, your hard earned assets could be at risk as a result of the Medicaid “Spend-down” requirements. By including Medicaid planning in your overall estate early on during your working years you can protect your assets and ensure that you qualify for benefits if you ever need them.
You Are Not Too Young to Get Started
Although it may be the farthest thing from your mind at this point in your life, the truth is that you are never too young to start retirement planning. The benefits of getting started early on in your working career are numerous. While it may be difficult for you to imagine your “Golden Years” right now, they will eventually arrive and you will want to enjoy them. In order to enjoy them, you need to be financially secure and feel as though you have all the “bases covered.” By planning ahead to ensure that your finances are in order, and your assets protected, you will have done just that.
For more information, please join us for one of our upcoming FREE seminars. If you have questions or concerns regarding retirement planning, Medicaid planning, or estate planning in general, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
Latest posts by Bob Nash, Partner (see all)
- Estate Planning Attorneys Remind You to Include Your Pets in Your Plan - April 30, 2018
- Living Trust Attorneys Explain How to Modify or Revoke a Trust - January 5, 2018
- Basics of Estate Planning: Lack of Coordination - November 7, 2017