Planning for Retirement Early in Life?

Almost without exception, people don't start planning for their retirement early enough in their lives. Young people leaving High School or College and going into their first paid employment find it about impossible to see themselves at age sixty or sixty-five - they simply can't do it. So, when the idea of planning for the day of retirement, perhaps forty plus years into the future, is put to them, their reaction is most likely to be disinterest, possibly scorn, and unfortunately often, dismissive disbelief - that this could ever happen to them.

It's usually well into the fourth decade of a person's life that the reality hits them - retirement is not only there but it's now visible on the horizon and it's time to do something about it. Panic rarely sets in. OK, it's there - but thirty years away and next week will be soon enough to go visit the bank or investment specialist. Unfortunately, next week drifts into next month and next month into next year. Suddenly another five years have slipped by and the day is now only twenty years away.

Now, panic may well set in and it's at this point that a lot of really poor decisions are made. The first mistake that people make is in their prediction of what they're going to need once they're not working. Inflation is, of course, totally unpredictable but high inflation is commonly accompanied by high yields in the stock market which are fed through into yields from pension funds so those factors tend to compensate each other. It's the actual income that's going to be needed that people get wrong. It's true that they won't need to worry about gas to get to and from the office or plant and there won't be the need for working clothes. Basic sustenance should be cheaper too - we'll both be at home, eating together, saving on the costs of bought lunches - with not being worn out by work, who'll need expensive Caribbean vacations?