There are a number of theories that are circulating about the true nature of human beings. Some argue that as a race of people we're just another breed of animal and that we live purely by instinct just as other animals do.
On the other side of the spectrum there are those that believe with all body and soul that we are higher beings with a higher intelligence that allows us to solve problems in ways that no animal can possibly do.
Regardless of what you may believe, it is clear that human beings have one quality that animals cannot do and that is to plan ahead. We think ahead in almost everything we do from deciding what to wear to choosing what our lives will be like in the future.
While it may be relatively easy for us to decide what to wear on that rainy day, some of us have a little difficulty in making retirement plans that will be played out in the distant future.
In the past, the life of a retiree was very different. Planning for the future was much simpler than it is now. According to Robert Brokamp of The Motley Fool,
Individual retirement accounts were just being created. There was no such thing as 401(k)s…. Older folks relied on… Social Security, pension checks, and savings. Retirement didn't last too long because life expectancies didn't go far beyond the age of 70.
Today, things are much different for the new generation of retirees. You'll live longer and you'll have a much busier lifestyle than your predecessors. This means you'll need to have more money to prepare for your future, a lot more money.
Here are a few tips to try to prepare you for a comfortable life during those retirement years.
Step #1. Set Your Goals
There was a time when you could work on a job for 30 years or more and retire with a big fat pension, a gold watch, and a sincere thank you for your dedication. Today, your retirement future depends heavily on what you do.
In most companies, pension plans are virtually extinct or at the very least they have made it to the endangered species list. This means you must plan ahead and have your goals firmly in place long before you reach retirement age.
With the slowly fading Social Security safety net more and more financial responsibility relies very heavily on the shoulders of those in the private sector. The fact is, that for most people when it comes to retirement there is no real safety net.
As a matter of fact some experts are cautioning that you don't want to rely on it at all because it may not be there. As pointed out by Anton Bayer, founder of Up Capital Management to USA Today,
As the government is moving more and more retirement income onto the private sector and individuals, you need to look at having a million dollars in your retirement plan at the time you're going to start drawing down on it. That sounds like a big number, but it's a real number.
For the average person having a million dollars may sound like a lot of money. Most of us won't see that much after working our entire lives. However, considering the extended lifespan these days, the figure is a realistic one and if you can do more than that, it is even better.
The truth, however, is that there is no possible way for the average person to accumulate that much cash unless they plan for it and start early having their money work for them.
Step #2. Analyze Your Finances Regularly
While it may be very helpful to have a financial adviser to assist you with your plans for the future, it does not mean that you should toss him the ball and forget about it. Financial experts suggest that you review your financial position at least once every 90 days to make sure that you're heading in the right direction. After all, you're planning a million dollar plus account; it deserves your serious concern.
When you're reviewing your financial situation you want to see that your account is making some forward movement, what returns are you getting on your investment, and what options you have before you.
The fact is that forward movement doesn't necessarily mean that you're making financial progress. If the rate of return is not keeping up with the rate of inflation you may actually be losing money. If this is the case, you need to know how to make a switch to build up your capital returns.
Step #3. Seize the Day
When it comes to your future retirement, every penny counts. Look at all the opportunities available to you and take advantage of as many as you can. If the company you're working for has a pension plan, take advantage of it, a 401k, uses that too.
Aside from the obvious, 401k's, IRA's, Roth accounts and such there are plenty of ways you can start to stock away enough cash to take you through your golden years.
When you take advantage of many of the possibilities open to you there are benefits you could never have without them. It will simplify your future goals. As pointed out by Nolo.com,
Another great advantage to many retirement plans is that some employees will match your contribution, usually up to a certain dollar amount or percentage of your annual salary. This amounts to your employer offering you free money…. If you can possibly afford it, take the free money.
There is only one reason why you shouldn't take advantage of such an opportunity. You don't have any money to contribute.
Even when it comes to retirement planning, youth works in your favor. Of course, no twenty year old is thinking about those geriatric years but the sooner you start making your plans for the future the more secure your future will be.
However, it doesn't matter when you start – the important thing is that you actually start. It's going to take some work to get that million dollars in your bank account.
Editor's Note: If you are an individual that enjoys the flexibility of having more control over your retirement account, you might want to learn the benefits of owning a self directed IRA. Click here learn more about them.