It is important to start saving for retirement as soon as you can to avoid being reliant on the state and having to dramatically adjust your lifestyle.
When you’re young, retirement seems like something in the distant future. It may be that you’re over 40 and feel like you’ve missed your opportunity, but it is never too late to start, regardless of your age and lifestyle.
Do you consider your future a priority?
Bond payments, rent, car payments and education are just a few of the big expenses most of us face in our lives. It is often difficult to prioritize your retirement with so many things in your life vying for a piece of your salary. Any disposable income tends to take care of our current wants and needs. Our immediate desires taking priority over our future, as we fall victim to a culture of instant gratification.
Look towards the future
Generally we invest in our health and wellbeing. Preparing our bodies and minds for the future without appreciating the importance of having financial security during our retirement years. In the future you will greatly appreciate the steps you took to care for your body. It is essential that you take that same drive and apply it to securing your financial future, allowing you to maintain your current lifestyle when you are too old to work.
We all find it difficult to empathize with our ageing selves, but millennials (people born between 1980 – 2000) find it particularly challenging.
Goldman Sachs posits that the more tech orientated millennials are poised to reshape the global economy. Millennials have different priorities and expectations than the generations preceding them. However, many of them find themselves swimming in student debt or still living with their parents. They tend to put off marriage and parenthood and see saving for retirement as a distant goal.
Fitting into this group is not all bad news. You tend to be healthier, but this makes it vitally important to provide for your retirement since it is likely that you will live longer.
It is often difficult to see the tangible benefits of saving when faced with desires today. One of the greatest barriers to saving is that we view our future selves as strangers. Often finding it difficult to connect. When faced with this disconnection from our future selves we begin to view saving as a choice between spending our money today or handing it to a stranger in the future.
Empathize with your future self
A study shows that participants, when faced with visions of their future selves, would allocate twice as much to their retirement savings as they typically would. Numerous achievers use a simple technique called visualization. By visualizing an outcome we witness the possibility of the achievement, which leads to greater motivation to pursue our goals.
Try visualizing what you’ll look like in the future, and the lifestyle you hope to have, before committing to any financial decisions.