IMPORTANCE OF EARLY RETIREMENT PLANNING

written by NOR RAFIDAH BINTI ROSLI

Retirement is something that will happen long in the future. At the age of 60 or 65 we will stop going to work and start living our free life. I am sure all of us would want an early retirement with a nice house, fancy car and the better life. But very few of us take the preparation of facing life after retirement seriously.
Retirement is a big deal for us but most people only remember to plan for it when they are getting close to their retirement age. Managing money would be more critical during retirement, when your income comes from your savings rather than from wages and earnings. Because your source of income is limited during retirement, you need to ensure that it lasts through your retirement years. This means you should start planning and saving for the retirement at a young age to avoid any problem occurring in the future.
Here I would like to explain why you should start planning for retirement at a young age. The first one is related to life expectancy. Life expectancy is likely to increase as a result of advance in technology. In other words, peoples are spending a relatively longer period of their lives during retirement and may outlive their financial capacities to maintain themselves and their dependents. Hence, planning for retirement at the young age is important to avoid from insufficient income during retirement.
Second is for medical emergencies. Older people are in poorer health as compares to the general population. With multiple health problems, they need to seek medical services that sometimes cost a lot amount of money. Failure here could lead them to sell their assets in order to meet such expenses. Therefore, you must start to plan for retirement now to make sure that you have enough money to support for medical expenses during retirement.
The last one is inflation. Increase in consumer prices can also cause considerable financial hardship to the old age. Therefore, in planning for retirement, you should also consider inflation factor. As you need to worry about it you need to account for it as well.
In short, planning for your retirement is an on-going process. It requires discipline, self-study and time. The earlier you start your old age planning, the better it is as you can minimize problems mentioned earlier during your retirement.