How did it get so late so soon?
It's night before it's afternoon.
December is here before it's June.
My goodness how the time has flewn. How did it get so late so soon? - Dr. Seuss
The question we should ask ourselves isn’t “Is it too late for me?” The real question is “What amazing things can I accomplish if I start now?”
Many older people wish they could go back to visit their younger selves and tell them to start saving something regularly. This definitely would make it easier to build a healthy retirement, but let’s really look at the math. If a 22-year-old saved $300 every month and got a 5% return compounded yearly on her investment, she would have $239,179.85 in 30 years. That’s a good leg up, but by today’s standards it’s probably not going to finance her retirement. Keep in mind that retirement, on average, is over 30 years.
To really look at starting where you are now, let’s take a hypothetical situation. Bob who is in his early 50’s, goes through some trauma during a divorce and a necessary move to a new state. When the dust settles, his salary is a quarter of what it had been, and he must drain every last penny to pay off his ex-wife and the attorneys. On top of that, Bob is dealing with the pressures of being a caregiver for his mom while trying to find a better paying job in a field that was slowly shrinking. He feels as though everything he has worked for had been ripped away in such a short period of time.
Bob decides one day he was done feeling sorry for himself. He meets for advice on how to get started on rebuilding his savings and his life. He walks away with a budget and an idea of how much he would need to save every year to have something for his retirement to go along with his social security and small pension.
He works hard for the next year. He decides not to give up. Bob goes through the budget and resolves on living a simpler life but on his terms. He dispenses with the things he doesn’t really need and finds he could still enjoy life. He finds ways to motivate himself when things get hard or when he begins to forget what he is building towards. By making these changes in his life, Bob can save much more than he thought possible and begins to contribute annually about a quarter of his paycheck.
By starting where he could and keeping motivated, Bob could be on track to retire between the ages of 67 to 70 with enough saved to supplement his social security and small pension. Bob never understood before that he could still enjoy each passing day while saving enough to regain control of his life. With hard work, Bob has been able to make up for lost time.
The main thing to remember is that it is never too late. You can fill the gap if you can make the necessary effort. If you really want to live the last 30 years of your life doing amazing things like traveling, going wine-tasting on a Wednesday afternoon, golfing and fishing, or simply relaxing without money worries, then roll up your sleeves and get to work because tempus fugit, as those old clocks and Dr. Seuss remind us.
If you’re looking for a review on where you stand for retirement, give us a call. www.onevisionretire.com
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