Eight Retirement Planning Factors Young Workers Need To Think About Now

&l;span&g;When you&a;rsquo;re in your 20s and 30s, retirement may be the furthest thing from your mind. Entry-level employees on a lower salary may defer 401(k) participation or contribute the bare minimum, promising themselves that they&a;rsquo;ll save more when they earn a raise.&l;/span&g;

It may be a stretch for your budget to set aside the&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://www.irs.gov/newsroom/irs-announces-2018-pension-plan-limitations-401k-contribution-limit-increases-to-18500-for-2018&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;IRS cap&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;of $18,500 per year, but it&a;rsquo;s never too early to start ramping up your retirement savings.&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://www.cnbc.com/2018/01/16/how-much-money-millennials-think-they-need-to-retire.html&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;According to&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;AARP, a retiree needs to have nearly&l;span&g;&a;nbsp;&l;/span&g;$1.2M saved up to enjoy a $40,000 a year, 30-year retirement.

Here&a;rsquo;s what eight members of&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://forbesfinancecouncil.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Forbes Finance Council&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;recommend younger workers consider as they think about their future retirement.

&l;img class=&q;size-large wp-image-2455&q; src=&q;http://blogs-images.forbes.com/forbesfinancecouncil/files/2018/03/Eight-Retirement-Planning-Factors-Young-Workers-Need-To-Think-About-Now-1200×721.jpg?width=960&q; alt=&q;&q; data-height=&q;721&q; data-width=&q;1200&q;&g;&l;em&g;Members share retirement tips for young workers.&l;/em&g;

&l;b&g;1. Life expectancy is increasing, which means a potentially longer retirement.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

How much Social Security will pay in the future — if any — is always one question. Longevity will be the other. Medical breakthroughs, both discovered and yet-to-be-discovered, will increase the&a;nbsp;life expectancy&a;nbsp;of future retirees. Some people may have a 40-year retirement, even if they retire at 65 or later. This may result in needing a larger nest egg, so saving earlier becomes more critical. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://www.linkedin.com/in/davidafrisch/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;David Frisch&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.frischfinancial.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Frisch Financial Group, Inc.&l;/a&g;

&l;b&g;2. You can&s;t plan for social security.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

The Congressional Budget Office takes an inventory of inflows and payouts of social security. Without any modification to the system, those born in the 1960s still have a high likelihood of receiving what&a;nbsp;was promised. Those born in the 1980s have a much lower chance of receipt. Therefore, the younger demographic must plan without depending on the social security system in retirement. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/paxfinancialgrp&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Darryl Lyons&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.paxfinancialgroup.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;PAX Financial Group LLC&l;/a&g;

&l;b&g;3. Medicare as we know it will not be the same&l;/b&g;&l;span&g;.&l;/span&g;

Prior to 1965, thousands of seniors went without health care in their later years. We&s;ve been lucky to have the kind of national health care program we do for our retirees. However, Medicare in its present form is unsustainable. Save more than you think you will need for your health care costs in retirement. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/boomerbenefits&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Danielle Kunkle&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://boomerbenefits.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Boomer Benefits&l;/a&g;

&l;b&g;4. Cash value life insurance can provide flexibility.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

New life insurance policies offer living benefits, which pay in the event of sickness, injury or death.&a;nbsp;You can accumulate tax-free retirement income, protect from disability and long-term care risks.&a;nbsp;Utilizing living benefits in life insurance is a great way to save money by eliminating the need for standalone long-term care and disability policies.&a;nbsp;New life policies offer robust flexibility. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/drewgurley&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Drew Gurley&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.redbirdagents.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Redbird Advisors&l;/a&g;

&l;b&g;5. Your lifestyle plays a big role in how much you need to save.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Younger workers have more time to take advantage of compounding, so if they can set aside a modest amount per year for retirement and invest it consistently, they will gain much more in interest than an older worker investing a higher amount. An older person will need to consider how much they will need to maintain the lifestyle they want and ensure that they have enough to do so. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/shanephurley&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Shane Hurley&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.redfynn.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;RedFynn Technologies&l;!–nextpage–&g;&l;/a&g;

&l;b&g;6. Put away small amounts now, and let It grow.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Millennials tend to face less job security and decreased salary potential (when accounting for inflation) than other generations. The good news is that they have time on their side to make up for it. Thanks to compound interest, putting away small amounts now can build a solid nest egg, because it has decades to grow. Remember, every penny put away now counts. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/ellekaplan&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Elle Kaplan&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.lexioncapital.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;LexION Capital&l;/a&g;

&l;b&g;7. Avoiding the stock market could hurt your future growth potential.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Younger workers today are wary of investing in the stock market, and they may&a;nbsp;feel more comfortable putting money away into a savings account rather than investing their money for the future. However, this can threaten their retirement savings, because the money&a;nbsp;cannot grow over time, and we as financial planners must&a;nbsp;educate and rebuild the trust among Americans lost during the Great Recession. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/wealthforesight&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Alexander Koury&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.valuesquest.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Values Quest&l;/a&g;

&l;div style=&q;padding: 20px 0pt;margin: 20px 0pt;border-bottom: 1px solid #DDDDDD;border-top: 1px solid #DDDDDD&q;&g;&l;a href=&q;http://www.forbesfinancecouncil.com/qualify/?source=forbes-text&q; target=&q;_blank&q;&g;Forbes Finance Council&l;/a&g; is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. &l;em&g;&l;a href=&q;http://www.forbesfinancecouncil.com/qualify/?source=forbes-text&q; target=&q;_blank&q;&g;Do I qualify?&l;/a&g;&l;/em&g;&l;/div&g;

&l;b&g;8. Long-term savings requires a long-term planning process.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Save early in your career, and save at least enough to get your company&s;s 401(k) match, if they provide one.&a;nbsp;Be as judicious as possible with debt. Don&s;t use your investment or retirement accounts as a piggy bank.&a;nbsp;Engage with advisers or platforms on your terms — those that you can best relate to or engage with. Don&s;t manage long-term money with a short-term point of view. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/gostro01&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Gregory Ostrowski&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.scmadvice.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Scarborough Capital Management&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;

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