Last year I was at a church retreat. At some point, we had a mens talk. Two of us; men in their 60s decided to talk about their lives, and their financial situations came up. One of the men is a missionary, the other a senior executive at a multinational. The executive said to us, he started working right after college, decided he wanted to work as an executive for his company at their international locations and started reading the Wall Street Journal religiously. Over time he had invested a good chunk of his income over the years. And he told us confidently that he had no fear about retirement.
The missionary had lived in many countries preaching the gospel and working odd jobs to make ends meet. His kids went to good schools, and he was happy to have been able to raise them in a loving family despite not having a lot, materially. About retirement, he essentially said he had no assets and really he’d lived his life by the Grace of God. So he had no worries. Now, I thought that was bonkers. In my head, I was thinking, how can you put yourself at such financial risk. “God isn’t going to save you from not preparing from retirement.”
Now I realise that was a stupid thing to think. The missionary had devoted his life to a mission more important and noble than money. And truly, as I believe, God does provide for His children. And missionaries, as do other people who set themselves apart for religious service, have a particular calling to abandon material wealth. But that’s not the case for most of us. Most us will work in normal, secular jobs and earn regular incomes over the course of our lives. Most of us will also live long enough to get into retirement.
The challenge is that most people don’t start thinking of or planning for retirement until it is a few years, or maybe even months away.
Now that’s dangerous.
Doing this means you’ve handed someone else the power to determine what your retirement income will be. It also means you may have wasted income you could enjoy in retirement, if you had invested more deliberately. For some people, it means they will have to work longer and harder than their bodies can handle, or need to handle.
Planning for retirement shouldn’t be something you leave until the last minute. It’s something you should start thinking about today. Whether you’re 20 and you’re just starting your first job. Or 35 and with two kids and a new house. You should certainly not start thinking about it at 55 when you are about to retire. Plus, if you start thinking about it early, you may actually realise you don’t have to work that job until 55.
So here two few things you can do in the next week to start thinking about retirement:
- Find about how pension plans work in your company and country: Are there special investment or savings accounts when you put money away for retirement? Does your company match every amount you put away in that account? If you’re an entrepreneur can you create a pension fund for yourself as employee of your company?
- Create a plan: Think about things like the age you want to retire from your job and what you’d do with the rest of your time. There’s more to life than working for income. Match that with how much it’ll cost you to live the lifestyle you want once you retire. Then start thinking about how you can build up investments to afford that lifestyle.
When should you start thinking about retirement? Now. Now when it’s so far off you don’t even worry about it. Now when you’re beginning your career and have no idea where you’ll end up. Don’t wait, start.