It works in theory, but becomes more troublesome in practice.
How are fees related to 401(k) retirement savings?
Experts say higher tariffs could lead to several factors affecting retirement savings.
These days, it can be difficult to save enough to live a comfortable retirement. Expenses continue to rise, and some seniors are having to build up their savings over 30 years or more. That’s a tall order, especially if you struggle to make regular contributions to your retirement accounts.
With all of this in mind, you may decide to give up on retirement altogether. In theory this could solve the problem, but in practice it’s more difficult than expected.
Why it’s hard to never retire
Although they may truly want to work for the rest of their lives, many people are forced to retire unexpectedly. For example, you may develop a serious illness that prevents you from working or requires you to care for a family member who is no longer able to care for you.
Changing jobs may make it difficult to continue employment. Some older people find it more difficult to find employment elsewhere after losing their job. If you have a physically demanding job, you may find it too difficult to maintain as you get older.
However, this does not mean that pivoting is not possible. Perhaps you can move to a less physically demanding job or find a remote job that allows you to stay home to care for a sick family member. It’s hard to know if this is an option for you.
Save what you can anyway
You may not have any plans to retire, but it’s worth setting aside some money in a tax-advantaged account as a safety net in case you are forced to retire. If you no longer need the funds, you can always pass them on to your heirs.
If you’re eligible, applying for a 401(k) match is a good place to start. This is basically free money and can help you reach your savings goals much faster than trying alone.
More than that, set aside as much money as you can. Ideally, you would be able to save a certain amount each month or pay period, but this may not be feasible for everyone. If you can’t contribute regularly, please do what you can. Maybe it’s saving money on your tax refund each year or putting $20 aside every few pay periods.
Your small donation may not seem like much now, but it can grow into thousands or tens of thousands of dollars, especially if you invest over several decades. They may just be a lifesaver if something unexpected happens.
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