25 years ago, young professionals bought homes for $500,000. Today, young professionals live at home with their parents because they can’t afford the same house that now costs $1.5 million. The housing market is the perfect example of why young people can no longer afford the things their parents once could and shows how different both living and retiring will be for the next generation.
Every young professional should begin planning for retirement as soon as they’re able. This includes taking Social Security payments, pensions, and retirement savings into account when budgeting. With the modern disappearance of pensions as well as lengthening life spans, extra income in retirement is necessary. This can come in many forms including setting up a secondary source of income such as a part-time job in a field like consulting or occasional working event. Either of these will help keep your bank account and 401(k)/IRA full, allowing your money to stretch over more years.
There’s no longer the illusion of leaving the workforce at 50 to travel and spend time with family because people today are often working well into their 60s and 70s.
An upside to the prolonged working life is the increased flexibility and control. If a retiree does not enjoy their job, it’s easy enough to quit and take on a new job. As we age past the ‘typical’ retirement point, the expectation of prestige lessens, and retirees are free to work on what they enjoy when they desire. Even an entry-level part-time job will help you keep your financial accounts afloat and add to the amount being saved and compounded through differing investment accounts.
Retiring isn’t as easy as it once was, it’s indefinitely more expensive and more complicated than 50 years ago. For this reason, young professionals need to start investing as soon as possible to both make the most of their income and stretch its effects for as long as possible. Be smart about your decision-making and use of your income.
Ask for your free Lifestyle Upgrade Assessment by calling Marilyn at 925-219-00802 or email at firstname.lastname@example.org.