Does life starts at 60 years old?
Abraham religions used to teach us that life start at conception while some other religions say that life start at birth.
Now insurance agents and financial planners are trying to preach us that life starts at 60 years old.
Their arguments are that save now, buy insurance, and invest in unit trusts. In other words, make your money work harder so that you can still enjoy present lifestyle after being forced to retire by your employers.
People are being instilled in their minds from as early as childhood, the need to plan for retirement.
As a result, we are lead into believing that based on current inflation rates; we actually need more than $1 million dollars to retire comfortably when the masses even have problems accumulating $1 million of wealth 40 years later.
Given that the average American earns about $32 000 per year, I wonder how he is going to have $1 million for retirement unless he is able to pick stocks like Warren Buffet.
This is considering the investment vehicles available to masses like mutual funds, fixed deposits etc, it is not feasible to have $1 million without saving and scrimping too much.
The mentality of save and invest until got million dollar nest egg leads a group of cautious people who plan more than 30 years ahead when still in their 20s, making themselves suffer with strict budgets, save every single cent whenever possible and buy things only when there are discounts.
But there is something wrong with the arguments that one needs to maintain his or her current lifestyle due to the following points.
Both needs and wants are totally different as you grow older.
Think about it. When you are 10 years old, all you need to feel happy and contented are the latest Teenage Mutant Ninja Turtles and Transformers toys.
Then when you are 20 years old, you want hot chicks and fast cars. Both of which require substantial financial expenditure.
Or if you are a woman, branded handbags and designer clothing.
Fine dining and holidays in exotic locations are common dreams to us all.
Finally when you are 70 years old, there is nothing much you can do other than wait to eat, wait to sleep and wait to die.
So what if you have $10 millions when you are 60 years old already? There is a good chance that you may already suffer from erectile dysfunctions, no use having millions and hot chicks.
For women, would you still want branded handbags and designer clothing if the whole body is already wrinkled?
Image at the end of everything, unlucky (highly possible considering the statistics now) get some heart disease, high cholesterol resulting in strokes, cancer and kidney failure that requires expensive medical care, some more long term also. All the money painstakingly saved and invest at the end of the day give back to doctors.
How much one need to retire depends very much on what you want after retirement age and your income level throughout your life.
One can try calculating the medical costs for chronic medical treatment for those common old age ailments as of now; compound it with inflation rate which is higher for medical costs than for other things, assume figures for income and savings rate in the years ahead.
If at the end of the day, all the nest egg barely covers medical costs decades later, may as well forget it. Enjoy life now and call it a day if the situation calls for it as in become chronically ill and requires expensive medical treatment forever until you steps into coffin.
Since you will just be saving and investing your hard earn savings only to give doctors later.
I think one will be better off enjoy branded handbags, designer clothing, fine dining and holidays in exotic locations now or within the forseeable future if it is not possible to have $1 million 40 years later.
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