With the ever-changing global economy, the only thing that remains constant is the importance of money. Over the past decade, financial experts have noticed a clear change in how people save up for their retirement.
While people used to believe in saving up liquid cash, the people of today are highly involved in diversifying their investment portfolios to create a stream of income for their retirement days. According to Bill Schantz, the people of this decade have understood the importance of retirement savings and begin planning for it from an age as early as eighteen.
Continue reading to learn how retirement savings have changed over the past decade.
Three Ways Retirement Savings Have Changed Over the Years as Per Bill Schantz
Saving up for retirement is a practice observed in almost every country worldwide. While some countries put greater significance on saving up wealth as liquid cash, some countries like the USA advise their citizens to invest their wealth into different investment opportunities to grow it for retirement.
However, according to Bill Schantz, the trend of saving up for retirement has completely changed. The three main changes that have been observed over the past decade are as follows:
1. The US Retirees Are Living Much Longer than Before
One major change that can be observed over the course of one year is the significant growth and advancement in the quality and accessibility of health care in the USA. With better healthcare and greater accessibility to cures for multiple diseases, the average lifespan of an American citizen has gone up.
Hence, people retiring by the age of 65 need a financial plan that will cover their needs for the expected 20 to 30 more years. According to Bill Schantz, this is one of the main reasons why people have begun investing more in their retirement savings.
Moreover, since every retirement fund will have a finite amount, people of today’s times are seen investing in a wide variety of different investment opportunities in order to increase their wealth and minimize the risks of investment.
2. The Costs of Living Have Gone Up Significantly
One noticeable difference that can be observed over the last decade is the drastic increase in the cost of living. From the cost of affording a college degree to paying for consumer items, everything is significantly more expensive than it used to be. This is primarily why the people of today are unable to purchase property or build their houses before the age of 40.
Since the costs of living and housing have gone up, people are aware that they need to save up for retirement accordingly to be able to afford a comfortable life in their old age.
3. Retirement Plans by Companies Do Not Offer Sufficient Post-Retirement Income
Almost a decade ago, when the cost of living was not so high, people could easily depend on the retirement plans and post-retirement income they received from the company or firm they had worked with.
However, due to the current inflation, post-retirement income is no longer enough. People have to invest their wealth in other places to create greater returns to afford the necessities of life. According to Bill Schantz, in this current era, even being a millionaire at times is not enough.
Final Thoughts by Bill Schantz
Unlike a decade ago, people of today’s times no longer can depend on a single post-retirement income if they wish to live a comfortable life. Instead, they need multiple sources of income if they wish to afford basic necessities.