If you’re asking yourself, “Should I start a retirement plan?” the answer is a resounding “yes!” if you actually mean “should I start saving for retirement?” There is no such thing as saving for retirement too soon. Time is your friend with retirement accounts, and the more time you have, the more your money will likely grow.
Ideally, you would have begun to save for retirement as soon as you started earning income. You would have put aside money every month to go into a 401k or an IRA account. That’s all the “planning” you need to do in your early twenties and into your mid-thirties.
As you approach your forties, you should carefully evaluate the current state of your finances and calculate whether or not you are on track to retire when you want to with the sufficient funds to maintain the lifestyle you want. You may need to make adjustments to the amount you are putting into your retirement accounts or consider making other investments.
When you are looking at investments, remember that diversification is key. This principle basically means that you don’t put all your eggs in one basket. The closer you get to retirement, the more spread out your investments should be. You don’t want to risk loosing a lifetime of savings when you are 59 years old because it will be next to impossible to rebuild it and still retire on time.
If you own a business, your business is an investment. However, it should not be your only investment. When you first started out, you may have poured every spare penny into your business. However, as you approach your fifties, you should consider investing in some other company. Invest in any other company. The more diversified your investments, the less risk you will take upon yourself.
No matter what age you are, you should ask yourself, “Should I start a retirement plan?” Remember: it is never too early to start saving and it is certainly never too early to make tentative plans. You can plan to retire at a certain age with a certain amount of assets when you’re thirty. Your plans may change when you are 55, but there is nothing wrong with making those plans. When it comes to retirement planning, too early is better than too late.