Starting a Retirement Fund If you earn money, you pay Social Security taxes, but the funds used to pay Social Security benefits are expected to become depleted in 2034, according to the Social Security Administration. Thus, it is unclear how well its benefits will cover the actual cost of living. Simply consider the debate today over chained CPI, a newer way of measuring inflation, and what that could mean to the value of future benefits. It is also important to note that the government (and many businesses) offers incentives to save. Putting aside money into an appropriate qualified retirement plan, such as an individual retirement account (IRA) or a 401(k), lowers a tax bill in the year that the money was saved and can accumulate tax-free for decades. Similarly, many companies will also contribute funds if an employee contributes to a retirement account. An employer’s contribution amounts to free money, and most financial advisors would encourage their clients to maximize this opportunity
What are the obstacles you facing when planning for retirement? Inflation, sequence of returns, unfilled income gaps, market risk, interest rate risks, taxes, long term care expenses, rising health care costs, technology and medical advancements are all real concerns that you need to think about. These are without a doubt the biggest retirement challenges.