Why You Should Start Saving for Retirement Now

Introduction 

Saving for retirement is a financial plan considered prudent for every human being conscious about their future. Old age is a period when human beings finally lack the ability to create their income from working. Therefore, surviving without a source of income during this period becomes a challenge especially because needs keep surging as human beings progress with age. For instance, healthcare expenses soar significantly during old age because advancement in age implies immunity, thus, becoming prone to different types of illnesses. The implication here is that retirement period demands more money to maintain a given lifestyle and normally survive relative to the early ages of active working. Based on these aspects, it is important to save for retirement. In the realm of Christianity, the behavior of saving is also encouraged: this study explores the concept of saving for retirement while relating it to financial aspects. 

Saving for Retirement 

A major reason why people need to save, especially in this modern society, is because they are obligated to by impending signs of upcoming tumultuous times with regard to available retirement compensation plans such as Social Security Fund Benefits and traditional pension plans (Clark et al., 2019). A critical lesson in the Bible regarding the assertion supports this reason. In Genesis 41:34-36 (ESV), God passes a message through Joseph to Pharaoh that Egypt needed to stock up enough grain during their seven years of abundance in harvest so that they could use their stock to sustain them during the preceding seven years of famine. The Egyptians did exactly that and survived the famine, to the extent of supporting neighboring regions such as Canaan. 

Most people rely on Social Security Funds during their retirement, which is a worrying situation. The major reason people need to save for retirement, especially in this modern world, is because Social Security Funds are never enough to sustain living standards during old age. According to recent evidence from the Social Security Administration, Social Security programs are sinking in insolvency which is projected to continue in the future unless legal reforms are made to adjust the attractiveness and benefits of the program. 

External forces impacting the deteriorating status of Social Security Fund, especially in the United States, include dynamics in demographics, taxation dynamics, and dynamics in patterns of government borrowing. In this case, in approximately twenty years in the future, benefits associated with Social Security Funds are expected to reduce significantly to about 70% of the current benefits for retirees. Therefore, it is critical for the current work force to devise new avenues of income collection during retirement to supplement the reduced social security benefits. The current social security fund events are clear warnings prompting vigilance in saving. Refusing to heed will cost involved individuals a big deal. Genesis 6-9 outlines the fate of disobedience to signs of an upcoming disaster, and the dangers of failing to plan for the worst. God had warned people through Noah about the upcoming torrential rains and exhorted them to build an ark to find refuge during the hard time; some of the masses who did not heed to God’s words and failed to participate in building of the ark perished in the floods while those that heeded and prepared, survived. 

In the same vein, few employees give the option of pensions and contribution to retirement savings apart from the government. Many traditional pension plans in the United States have been eliminated over the years: based on statistics from the Boston College Center for Retirement Research, the number of pension plans and their respective uptake by the public has reduced over the years from about 90% to 30% (Finke & Huston, 2013). Therefore, many people need to save their situations on future. This result has been brought about by many employers decision to shift from Defined Benefit plans to Defined Contribution plans so that they can cut down on their liabilities. However, by countering these shifts and trends through saving plans such as 401(k) an individual can cushion themselves against disastrous effects of these trends by securing benefits influenced by compounded interest rates (Samwick, 2006). In the same way, the fate of the Pharaoh in Exodus can be witnessed for lack of heeding to signs of an upcoming storm; failure to heed to these trends is likely to cost the working force that does not itend to save. The Pharaoh was hit by ten plagues before he finally saw the need of letting the Israelites leave Egypt. As Christians, people do not need to wait for ten signs to do what is right. 

A critical and perhaps the most fundamental reason why it is important to save for retirement is because the future is always uncertain especially with assurance of between low to zero income in old age (Finke & Huston, 2013). Biblical teachings about preparedness for the future also appreciate this fact in the sense that as human beings, people ought to plan their finances for the future unless they desire to fail. For instance, Proverbs 13:16 (ESV) associates wisdom to forward thinking and foolishness to short sightedness. In this sense, by being wise it implies an understanding of the fact that the future is not always promised, and planning gives a bit of leverage against uncertainties. Luke 14:28-30 (ESV) also supports the same with the sentiment about building a house, that a tower needs to be built by first establishing associated costs and proper budgeting lest the builder be mocked for an unfinished building in future for lack of planning. As life expectancy tends to increase with time, many retirees can expect to deplete their assets. According to recent reports on the current life expectancy for an American born in the 21st century, the projected life span is 78 years which means that going forward, individuals should expect spending many years in retirement hence high likelihood of depleting their assets early into retirement. Also, expenses are exposed to wider uncertainties as people age: healthcare expenses tend to increase, among other expenditures. For instance, healthcare costs in the United States are expected to increase by approximately 5% on annual basis into the future and take up almost 90% of social security benefits. Therefore, people need to be wise like the ants as stated in Proverbs 6:6-8 (ESV) which still stores its provision in summer and gathers food during harvest time yet it has no social codes and rules. 

Conclusion 

Based in the discussion above, saving for retirement is a decision that every person ought to do to secure their future. The importance of securing the future through savings especially in retirement, is out of the uncertainties the future carries, the impending signs of low income in future, among other reasons. As Christians, adhering to saving plans for retirement comes as a command in most cases as it is written in the Bible. Corinthians 16:2 (ESV) insists that every first day of the week, people should put aside a given amount of money from their income for savings so that when the time for collections comes around, they do not get stuck and suffer. In this sense, it is never too late or too early to start up savings for retirement, although the earlier a person enacts a retirement saving plan the better. 

References  

Clark, R. L., Hammond, R. G., & Khalaf, C. (2019). Planning for retirement? The importance of time preferences. Journal of Labor Research, 40(2), 127-150. 

ESV: Study Bible : English Standard Version. Wheaton, Ill: Crossway Bibles, 2007. Print. 

Finke, M. S., & Huston, S. J. (2013). Time preference and the importance of saving for retirement. Journal of Economic Behavior & Organization, 89, 23-34. 

Samwick, A. A. (2006). Saving for retirement: Understanding the importance of heterogeneity. Business Economics, 41(1), 21-27.