Retirement planning is one of the most essential elements of financial planning, which often gets ignored or is not given as much importance as it needs. As a young earner, retirement might feel like a lifetime later but it is never too soon to start planning for it. If your goal is to live a comfortable retirement life, then investing in a retirement fund early is the best thing that you can do.
According to William Schantz’s observation, fewer people are participating in retirement plans. Almost half of working-class American households don’t have any savings for their retirement.
Saving for retirement is very important to ensure long term financial stability and security. If you want to have a comfortable retirement life, it’s essential to start saving up towards it from now. It is a financial habit that will save you from a lot of challenges in your post-retirement life.
If you’re still unsure about the importance of retirement planning, then Schantz has all the right reasons for you to consider. Let’s learn about them below!
Make Responsible Financial Choices from the Beginning
Life is very unpredictable and you can never know when your financial situation may change. That is why it is essential to plan. When you have a retirement plan in the making, you already know what goals you have set for yourself and where you want to see your finances in the future.
Questions such as whether to keep working as an employee, or starting a new business need to be answered by having an understanding of your own finances. Not just in the present, but also in the future. This is why William Schantz says that if you start your retirement planning right now, you will be able to make better financial decisions for your future from today.
Retirement planning is not only helpful in securing your future, but it also plays an integral role in helping you reduce taxes. If you begin your tax strategies during your working years, you won’t have to spend extra bucks paying taxes in your retirement year.
During working years, when we have a stable income, we are less likely to have control over our income sources which is why Schantz says that finding tax credits and deductions to reduce taxable income is a top priority. But upon retirement, you can have more control over your income sources, and then you can reduce your taxes. If you plan smartly, you can have the sources of income at the time of retirement: tax-managed, tax-deferred, and tax-free.
Final Thoughts by Schantz
After retiring, you lose a consistent source of income. That is why retirement planning is so critical for ensuring your financial protection and sustainability. With retirement plans, you can strategize ahead of time to make sure you have enough income even after retirement to be able to face unforeseen circumstances. William Schantz emphasizes on investing in high value and diverse retirement fund portfolios.