Retirement planning is one of the most important responsibilities that is often overlooked. When we think of retirement, how often do we consider what type of financial needs we will have when the time comes? With numerous retirement systems and the various ways in which someone can invest, retirement systems are becoming increasingly prevalent in today’s society.


You may be tempted to place retirement planning on the back burner for several reasons. In today’s fast-paced and overscheduled society, the immediacy of daily responsibilities can be overwhelming to us all. With today’s social economy, budgeting and financial demand play the largest influence in our decisions to spend money. Some of us opt to utilize our available funds for entertainment and material desires. Many of us choose to bypass retirement planning in order to meet the demands in our household. Therefore, planning for a retirement tends to place a burden on families with limited incomes. In addition, many of us may believe that Social Security will be enough to provide us with an adequate retirement. However, the realities of your financial future without effective planning may startle you.


Many of us take the kids to school, go to work, pick up groceries, make dinner, do laundry, attend the soccer game, and find time to sleep and then again sometimes not. How many of us suffer from extremely busy day syndrome? So with all that you are doing in the present, why would you worry about something so far away?

According to the MetLife Consumer Education Center for retirement planning, “the sooner you start preparing for retirement and the more thoroughly you plan, the more likely you are to enjoy yourself when retirement actually comes.” (Planning for Retirement)


A well-executed retirement plan can provide quicker monetary growth.

“The younger you are, the more distant is retirement -- and the more power you have at your fingertips in the form of compound returns over time” (How to Retire in Style). For example, using the graph as illustrated below, an individual who contributed an average of $2,000 per year in an IRA account, following a 30-year 6% investment plan would earn approximately $158,000 and would have only invested $60,000. On the other hand, a late start on retirement investing in an IRA would net you only an approximate $110,000 on a 25-year plan with an investment of $50,000. Simply allowing an extra 5 years for retirement contribution, you allow yourself to more than triple your investment. By looking at the chart below, it is obvious as to why early retirement planning is essential and beneficial at the same time.

After speaking with a recently retired Police Officer from my department, Officer Van Spencer states, “If I would have known how much I could have earned, I would have started investing when I was in my twenties.” This particular officer waited until his last 15 years of service before researching into alternate means of retirement, and since his retirement has re-entered the workforce to work towards a second pension to enable a comfortable retirement.


In a survey conducted by the Employee Benefit Research Institute (EBRI) “reported that the results of the most recent annual Retirement Confidence Survey showed that 25% of those currently "retired" have worked for pay in retirement, and that 67% of current workers expect to work for pay after retiring.” (Report of the Working Group on Phased Retirement) This is an alarming number considering the average age of working Americans that enter retirement choose to do so around the age of 60. A study conducted by Richard Johnson, and economist in the research division with the Federal Reserve Bank in Kansas City has shown the average age of retirement has declined from an average age of “66yrs in 1960 to 63.6 yrs in 2000,” (Why the “average age” is a misleading measure of labor supply) according to EBRI nearly “67% of these workers expect to continue in the work force after retiring.” In my opinion men and women who have worked up to the ages of their mid 60’s should have the opportunity to enjoy the accomplishments of retirement and not feel burdened to return into the work force to make ends meet.

An excellent statement from Scott Reeves at Forbes.com on investing stated, “You're not immortal, you're not going to win the lottery, and planning to get sent up the river so you get three hot meals and a cot while carrying on dazzling intellectual conversations with fellow inmates isn't a good retirement plan” (Reeves). What will your retirement future look like? The truth is, it will be here sooner than you expect and when it does, you will feel more at ease knowing that you are financially prepared.