The 2:1 principle: for every 2 years spent working, you have to save for 1 year of retirement

Most of us are guilty of making eleventh-hour decisions, especially those related to topics we are not comfortable with.  Only a few of us are planners in the true sense. Kudos to those of you who know a year in advance where you will be traveling for the holidays and where you will be celebrating Thanksgiving and Christmas!
Most of us are not made to function like that and don’t like to plan ahead.  I totally get it.  We like to live carefree lives and make spontaneous decisions.  That’s how I’m wired too.  I typically don’t even think about Christmas until after Thanksgiving. The problem is, that this does not work very well for retirement planning.  We all know that more and more employers are no longer providing pension benefits. Millennials and Gen Xers are left to fend for themselves. It’s highly unlikely that when we retire, we will get any paychecks from the Government (social security) or from our former employers in the form of pension.
This leaves us with two options –  either we work until we breathe our last or start investing early for retirement. If you start investing $5,000 dollars a year at the age of 21, you can accumulate close to $5.5 million by the age of 67 years and can then enjoy the fruit of planning ahead by being able to do whatever you’ve always wanted to do without having to worry about paying bills. Unless you plan to buy a plane or yacht (trust me when I say I’d love to have both), $5.5 million is enough to live a good retired life.
Retirement $5000            Retirement $12500
If you delay kicking off the retirement planning process by 10 years and start saving at the age of 31 years, you can only accumulate $2.3 million. Sounds like lot less cash, right? I hear you. If you want to come anywhere close to $5.5 million at this point, you have to contribute 2.5 times i.e. $12,500 a year to get to $5.5 million for retirement. A huge penalty for a late start!
After reading this, you may make a mental note – ‘Oh I will start looking into this tomorrow, or over the weekend or next month.’  Days, weeks, months or even years may go by before it hits you one day that it’s slightly too late and that you should have planned better and much sooner.
Luckily, technology has come to our rescue and an app like Plootus has made retirement planning very easy, even for those who are not financially savvy.  It is available literally at your fingertips for downloading from the Apple and Android app stores and tells you how much to save and where to invest for a happily ever after.  So the next time you pick up your phone to look at Facebook News Feed updates, it may be worth your time to download at Plootus, a ‘financial advisor’ at your disposal. The app will assist you with planning your retirement without having to sacrifice your weekends and weeknights today for a secure tomorrow. I will cover how to choose investments for your retirement planning in my next blog update. Don’t worry if you are not a finance professional or have not done that before!  We will take baby steps.
Until next time!
Author: Sunil Gangwani, Co-Founder, Plootus 10 minutes could add 50 thousand dollars or more to your retirement account!
Download on Apple Store: Plootus
Download on Android Store: Plootus

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