Planning For Tomorrow

If you're still 20 to 30 years away from retirement, you probably haven't given your golden years much thought. In fact, you probably have so many current bills to pay -- possibly even student loans -- that the thought of saving money for a future time may not be appealing. Besides, if worse comes to worse, you could always try to live solely off of your social security checks once you retire, right? 

Unfortunately, by the time millennials are ready to retire, social security payments are projected to be cut by around 25 percent. So it's definitely important that you have a means to supplement those benefits. According to the Social Security Administration, the program is running low on funds because:

• The population is aging at the same time that the birth rates have dropped from three children per woman to two. That means there will be fewer people working and contributing taxes to the system.
• The Social Security Trust, which contained a surplus of money that had been collected during a time when taxes exceeded the amount of benefits being paid out, is predicted to run out in 2034. 

What Can You Do?

Even though your retirement years may seem like a distant mirage on the horizon, it's not as far away as you think. And that is why you need to start planning today. Of course, that may be easier said than done. Planning for retirement requires knowledge of the tax laws and also awareness of future legislation that may be coming down the pike. President Donald Trump, for example, is talking about making the "biggest tax cut in history." Some of the changes he is proposing could affect the way you save for retirement, according to MarketWatch. 

Because planning for your retirement can be so complicated, it is highly advisable that you consult with a professional income planning service advisor, who can help you:

• Structure a portfolio. They may suggest, for example, having money automatically deducted from each paycheck and deposited into a savings or an investment account.   
• Determine the best age for you to retire and to start taking social security. While you may want to retire at 65, it may be better for you financially to wait until you are 70. 
• Show you how you will need to adjust your investment allocations as you age. When you're younger, your investments will typically be in more aggressive products than when you're older.

While it may seem like you're still years from retiring, it's imperative that you start income planning now so that you will have adequate funds to see you through your golden years.