The retirement is an element of financial planning. The financial planning is said not completed if it does not include the retirement. Either employee or businessman needs retirement fund. Those funds are important when they retire from company. We realize that we cannot work forever. Old man cannot work fast as the young man. Some old man has disease. They cannot stand for hours or sit in the front of the computer for hours. That is why the company retire the old man and replace them with young man. The company want the efficient and effective employee or labour to gain profit.
After retire, the retiree has no paycheck from the boss.If the worker has a business, they can generate money from there. The business revenue can replace the paycheck. However, not all retiree has business, so they just expect the money from retirement fund.
If you save much money in retirement fund, You can withdrawn much money too and reversely.
When the worker near retire, the spending could increases. Perhaps they need big fund for kid education. The college fund is high today especially medical school.
When you retire, you may need to maintenance your house because you have used it for dozen years. The leak roof should be improved or it will damage the other part house. For the retirement who has not yet pay the mortgage off, they need so much money.
For the freelancers or businessman, they should contribute to the retirement fund too. They are different from employee which the company cut the retirement fund from the salary directly. The freelancers or businessman should earmark the payment and business profit to the retirement fund.
To get the great retirement fund, people should contribute early. They can start to contribute at twenties. The money will grow over many times. They will withdraw more money than employee who starts contribute lately. Example, Mr Jones started contribute the retirement fund at 20. He used to paid $100 each month. Now, Mr Jones decide to withdrawn the retire after 50 years work. He will get equals. On the other hand, Mr Thorn used to contribute $100 but he started to save at 40. He also withdrawn at the 70. Mr Thorn got equals
We can see Jones got more money than Mr Thorn despite those two employee contribute $100. Jones has started to contribute earlier than Thorn.