Why Invest for Your Retirement?

For a moment, imagine what your life would be like without a steady paycheck or an annual salary? How would you pay for your mortgage? Your electric bill? Your groceries? Your medical expenses?

Most of us will have three primary sources of income for financial support during our retirement: Social Security, company retirement benefits, and personal savings. Many people overestimate how much income Social Security will provide during this time. And with the uncertain state of the Social Security system, no one can accurately predict the amount of benefits they will receive from the program in the future.

That means more of us will have to rely on company retirement plans and personal savings for financial support during retirement. The chart below shows the income sources of the average retiree today. In the future, the amount a retiree will receive from Social Security will likely decrease. That means the portions of total income from personal savings and company retirement plans will have to increase.