Times have changed. No longer is it common for a person to work for one company for 20+ years and have the company take care of your financial future with a guaranteed income through a pension when you decide work is optional. Some may even have thrown in a gold watch to say thank you for your sweat. The percentage of companies that offered a pension plan in the early 1980s was approximately 60 percent. Today, that number has dropped drastically and sits at about 4 percent.
We are currently in a period that many call The Great Resignation. People are leaving their jobs in droves. Rightfully so. Many people are realizing that there are opportunities out there that provide a better work life balance, a higher and/or livable pay that improves their quality of life. Since 401(k)s and other traditional employer-sponsored retirement plans have become popular, the burden is now fully on the employee to take care of their financial future. More input is necessary to secure a comfortable financial future. Let’s look at some actionable steps you can take to work towards the future you wish to have.
- Plan Ahead
Have a concrete number that you would like to have accumulated by the time you reach your “work is optional” phase. This number is different for everyone and you should not compare your needs to others. The type of lifestyle you live plays a huge factor in how high, or low, this number can be. You’ll have to explore other options, like an annuity, if you need a source of income that you cannot outlive. Alternatively, you could stash away more assets among your financial accounts to draw income from as you need it.
- Manage Your Lifestyle
This step is by far the most important. You cannot achieve the previous step or even think about the next step if your lifestyle isn’t properly managed. What I mean—“Not spending more than you earn.” Regardless of what your income level is, if you spend more than you earn, any goal you set for yourself is unattainable. Yes, life tends to throw curveballs from time to time. Control the things you can control.
- Work with a Professional
Although there is a ton of information posted online about finances, what’s never posted online are the nuances or details that come with the information provided. It would be wise to consult someone who could offer advice to aid you in your efforts.
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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company.