Is Retirement important?


No one likes to think about growing old, not even middle-aged people. But it must be confronted sooner, rather than later, because “later” is precisely when we need structure to be in place. We might think we’re too young to start preparing, but that is a comfortable lie, not a practical plan.

Why should you care about retirement?

Most of us will not be in positions late in life where we can earn an income. We will either be too old or forced out of careers. Most countries have set dates of when people have to retire. Of course, if we run our own business, we can probably do what we like – but that’s not most of us. So it’s wise to start considering retirement because it sets a foundation for us to live well, even when we’re not working.

Money Under 30 puts it in a way most students can appreciate. They write: “Retirement is your eventual freedom from wage slavery — the necessity of working for food and shelter. Money you save for retirement is money that buys freedom to do whatever you want.”

Who wouldn’t want the freedom to live how they want? Indeed, it’s this goal we are all working towards.

How students can prepare now

The major advantage students have is time. By saving early and saving now, students can build up more for retirement. Each month, we can save less since we’re saving longer. If we only start saving later in life, beyond, say, 35, we have to start saving significantly more. CheatSheet outlines three reasons why early saving is best: we can retire earlier, prevent procrastination, and – as we already noted – more time means more money saved.

Furthermore, saving early means we can overcome the difficulties of market fluctuations. CheatSheet notes: “Market returns are not guaranteed and certainly come with … volatility… but the math shows the benefits of compounding returns over a greater period of time. The earlier you start, the better your chances will be of reaching your financial goals.”

This is particularly important for those who live in less rich countries. Having money means we can look after our health, children and so on. For example, we can examine better medical aid for pensioners in South Africa, India and elsewhere if young people in those countries begin acting sooner.

We don’t want to be left in the cold because mere laziness or poor budgeting prevented us from obtaining our freedom. It might seem far away, but distance doesn’t negate reality. We must plan now, while time is on our side rather than an enemy.

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