John F. Kennedy once said, “Change is the law of life. And those who look only to the past or present are certain to miss the future.” This is certainly true of preparing for retirement. If we continue to expect that the ways of the past will see us through to our futures, we will be left behind. Many of the methods, strategies and principles that helped prepare us for retirement in the past are quickly disappearing and/or just simply ineffective in today’s financial world.
Gone are the days of being able to rely on the government and an employer to take care of you. Traditional pension plans, which gained prominence in the 20th century, are rapidly disappearing because of the high costs involved in funding them. Some corporations are defaulting on their plans, and an increasing number of companies have underfunded or at-risk plans. Even companies with healthy plans may decide that defined-benefit plans are not worth the cost. In addition, some companies are also eliminating health and life insurance benefits at retirement. This can be a big loss if you retire before Medicare benefits begin.
Unfortunately, pension plans and company life and health benefits are not the only things being cut. Social Security is heavily underfunded and facing many issues. Even though Social Security should remain in the future, many changes to the system are happening and more will be coming in the future. Thus, not only do you have to adapt to the new financial tools and strategies, you also have more responsibility on yourself now to save properly for retirement.
So, what do you need to do? Well, it is very simple. Become educated. You are going to have to follow some new principles and new rules, and learn the latest strategies in order to have a successful retirement plan, such as:
The financial world is changing, and will continue to change. Proper knowledge, education and updated information has never been more important. Unfortunately, obtaining this is not easy. Retirement planning is not taught in high schools or colleges. The internet is loaded with information, but much of it is outdated and inaccurate and of course not related to your specific situation. And free dinner workshops and seminars are popular for pre-retirees and retirees, but these are mainly hosted by commission based salesmen.
One option is to sign up for a retirement education course through The Prepare Institute. To learn more, click here to find classes near you.