Has anyone ever asked you about your desired occupation? Most likely! It’s a question that occupies the minds of many children. Even adults often consider changing jobs or careers. But have you ever thought about what you will do after your working years?

The phase of life that follows a person’s working years is known as retirement. Not everyone retires. However, those who do need to carefully plan and save money in order to retire.

In the United States, the typical retirement age is 65. Some people retire earlier, while others work longer. Regardless, those who retire begin preparing for this stage of life many years in advance. In fact, experts emphasize the importance of saving for retirement as soon as you start working.

How do people prepare for retirement? First, they need to establish a savings target. To do this, they set a desired retirement age and estimate the number of years they are likely to live after retirement. Most individuals estimate that they will need enough funds to sustain themselves for 20 years after they stop working.

Next, it’s time to start saving! There are various methods people use to save for retirement. Many employers assist their employees in saving for retirement and even make contributions to their savings. For instance, some companies offer a 401(k) plan. This allows individuals to allocate a portion of their salary towards their retirement savings before taxes are deducted. Often, employers match employee contributions to these plans up to a certain amount.

Many people also open Individual Retirement Accounts (IRAs). IRAs also offer tax benefits, and individuals can deposit up to $6,000 per year into these accounts. The funds in both 401(k)s and IRAs are invested, meaning that the amount in these accounts will fluctuate with the stock market. The objective is to grow the retirement account more rapidly through investment.

Many governments also support individuals in preparing for retirement. In the U.S., many retirees receive Social Security payments. For many people, this constitutes approximately 40 percent of their post-retirement income. In some other countries, retirees receive similar payments from a pension system.

What do people do during retirement? They have the freedom to choose how they spend their time. They might spend more time with friends and family members. Many devote more time to their hobbies or acquire new skills. Some individuals embark on world travels!

Occasionally, individuals even take on new jobs during retirement. In these cases, they often pursue a job that aligns with their interests rather than focusing on the income it generates. Many people also become volunteers, dedicating their time to causes they care about during retirement.

Do you know anyone who is retired? How do they spend their time? Do you envision yourself retiring one day? If so, it is advisable to start planning early! It is never too soon to begin preparing for retirement.

Try It Out

Ready to continue learning? Explore one or more of the activities below with the assistance of a friend or family member.

Simple Saving Tricks: Start Preparing for Retirement

Discover these 5 easy saving techniques. Whether you’re earning money or not, learning how to save is a smart way to begin planning for retirement early. Which of these tips can you implement today? Discuss with a friend or family member.

Have you thought about your future career? What makes you believe that you’re a good fit for it? What aspects of it do you find most enjoyable? And how will you start preparing for retirement from the beginning of your career? Write a letter or email to a friend or family member explaining your strategy. Make sure to include the information you learned in today’s Wonder.

Retirement often involves traveling. Where would you like to visit the most? Seek assistance from an adult to conduct your own research about the destination you desire. Then, create a travel brochure that convinces others to explore this location as well! Remember to include captivating pictures and intriguing facts to pique their interest.

Wonder Sources

• https://www.investopedia.com/terms/r/retirement.asp (accessed 30 Apr. 2021)
• https://www.thebalance.com/what-is-retirement-2388822 (accessed 30 Apr. 2021)
• https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/top-10-ways-to-prepare-for-retirement.pdf (accessed 30 Apr. 2021)
• https://learnersdictionary.com/ (accessed 30 Apr. 2021)

FAQ

1. What is retirement from a job?

Retirement from a job refers to the stage in a person’s life when they choose to stop working and exit the workforce permanently. It is a time when individuals have reached a certain age or fulfilled specific criteria, such as having enough savings or qualifying for a pension, allowing them to leave their employment without financial constraints.

2. What are the reasons for retiring from a job?

There can be several reasons for retiring from a job. Some people retire because they have reached the age of retirement set by their country or employer. Others retire because they want to spend more time with family, pursue hobbies, or travel. Health issues, job dissatisfaction, or the desire to start a new venture are also common reasons for retiring from a job.

3. How does retirement affect a person’s finances?

Retirement can have a significant impact on a person’s finances. When an individual retires, they may no longer receive a regular paycheck from their job. Instead, they rely on their retirement savings, pension, or social security benefits to cover their expenses. It is crucial for individuals to plan and save for retirement to ensure they have enough funds to maintain their desired lifestyle during their non-working years.

4. What are the options for retirees after leaving their job?

After leaving their job, retirees have various options to consider. Some choose to relax and enjoy their free time, while others engage in volunteer work, take up new hobbies, or pursue educational opportunities. Retirees may also opt for part-time work, consulting, or starting their own business to stay active and supplement their income. The choice ultimately depends on individual preferences, financial needs, and personal circumstances.