Significance

• You may never want to give up working. That's fine. But, you may not have a choice. You must recognize that your health may deteriorate or you may become involved in some accident which prevents you from working at all. Or, you may be prevented from working as much as you used to. Your savings will protect you. You have many options to save money. Your employer may offer you a retirement account called a 401k plan. This account defers a portion of your income, before paying tax on that income, for the future. You choose investments to help you grow your nest egg and accumulate enough money to live on when you are no longer working. Other retirement accounts take the form of insurance policies, like annuities. Annuities allow you to defer a portion of your income, after you've paid taxes on that income, to an account held with an insurance company. You may either choose your own investments or let the insurance company manage the investments for you.
  
  

Benefit

• Saving money for your future means that you won't need to worry about how to survive when you're older. Your employer may eventually decide that you are no longer able to do an effective job for the company. At this point, you'll be asked to retire. Your savings means you can enjoy doing something other than working strictly for money. Perhaps you can take up a hobby that you never had much time for during your working years.
  
  

Warning

• You should start saving money when you're young. As you get older, you may find it more difficult to build a retirement nest egg. You may have many financial liabilities and obligations that make it difficult or impossible to save money. Additionally, you won't have as long to save before you are expected to retire or your chances of not being able to work increase.
  
  

Consideration

• Expenses and what you intend to do when you retire drive your retirement nest egg needs. If you are not working for money, then your savings need to be higher, since you'll be spending most of your day not making any money. If you intend to try to work for as long as you can, and make money, your nest egg size may not need to be as large. In either case, you'll probably want to consult with a professional investment adviser and a financial planner to coordinate your financial goals and make sure you have enough money to live on.