When I first started working I thought, ‘why should I worry about retirement right now? I’ll be working for at least 40 years, so whats the point of saving now?’
I had just secured my first full time job, I was barely making ends meet, and I didn’t see the benefit of contributing to my retirement account. However, I was lucky to have people in my corner who convinced me to save for retirement early. Here are a few reasons why athletes should put money aside for life after sports, and life after work:
7 Reasons Why Athletes Should Save for Retirement
You’ll earn compound interest. By saving for retirement now, you’re letting time work to your advantage. In simple terms, compound interest is the ‘interest you earn on interest’. The earlier you start saving for retirement, the faster you’ll see growth as you’ll be earning interest on your original balance, the interest you accrue, and future interest.
It’s easier to save. The earlier you start, the less you’ll need to save each month to reach your ideal retirement goal. Saving for retirement early means you don’t have to save aggressively later in life, and you’ll have more disposable income to work with each day.
You won’t have to rely on social security. While many may bet on social security, I’m not counting on those funds to ensure I’m living comfortably when I retire. Having my own savings for retirement gives me security knowing I won’t have to solely rely on public funds… funds that might not be fully available by the time I’m 65 years old.
You’ll benefit from tax benefits. Saving for retirement now means you can take advantage of tax-deferred retirement accounts. For example, athletes who qualify for Roth IRA’s can pay taxes up front, making future withdrawals from thier account tax -free.
Your healthcare is covered. If you’ve ever experienced a sports-related injury or sickness, you probably know how bills can add up. Even with insurance, the cost of doctors visits, physical therapy and other treatments can pile up quickly. Saving for retirement means having the funds to cover unexpected healthcare costs in the future.
A happier relationship. Money is one of the top causes of divorce. Not being on the same page with your partner when it comes to money can cause a lot of stress within your relationship. When couples plan for retirement together, they’re able to eliminate future stress and instead, talk about the fun things, like where you both plan to retire or your plans for when you finish working.
You won’t be a burden. If you have kids or other family members you care about, saving for retirement means they won’t bear the financial stress of covering for you in the future. Many times older adults are forced to retire earlier than they expected- layoffs, health issues or other things happen. Having a retirement fund means you’ll have the means to live a comfortable life without putting pressure on those closest to you.