Why You’ll Probably Need to Retire Earlier Than You Think—And How to Not Go Broke
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When it comes to retirement planning, there’s a broad range of preparedness. Perhaps you’ve figured out exactly how much money you need to retire, authored a brilliant saving plan, and even researched the best states to retire in. Or maybe you’re on the other end of the spectrum: way behind on building wealth and in danger of running out of money in retirement—not exactly an ideal situation after your earning power has expired.
No matter what your plan (or non-plan), when it comes to retirement, expectations rarely match reality. A new report makes that clearer than ever.
Retirement Expectations vs. Reality
According to the Employee Benefit Research Institute’s Retirement Confidence Survey, most workers envision a longer runway to retirement than reality affords. Here’s the latest data (emphasis ours):
Consistent with prior years, the median retirement age among retirees is 62 years old, while workers’ median expected retirement age is 65. The past year has caused about 1 in 4 workers to adjust the age at which they plan to retire, including 17% who now plan to retire later and 6% who plan to retire earlier.
That’s a full three years of saving and compounding the average retiree is planning for, only to miss out on. Knowing this psychological hurdle, you now have yet another big reason to put a smart retirement strategy in place.
Retirement Planning Starts Now
Regardless of your plan, the best financial move you can make for your future self is invest early. Starting the compounding snowball in your 20s rather than your 30s can make an astronomical difference.
As for what to invest in, here are some smart ideas and guides to get started:
- Invest in commercial real estate deals you’d never have access to through the crowdfunding sites
- Invest in dividend stocks and reinvest their dividends
- Start a business and outsource all the work
- Automatically invest excess cash with an app like Acorns
Feel like you’re behind on retirement? Here are three immediate moves to make to jumpstart your savings.