Depending on the government in retirement might not seem like a terrible plan because you can just work, enjoy your life, spend your money freely and then get your retirement taken care of. No sacrifice, or giving up any fun required!
English Teacher’s Precarious Situation
I’ve been thinking about the question of when is too late to start saving for retirement as I’ve been writing my book about personal finance for English teachers. I think that English teachers are in an especially precarious situation financially if they don’t start saving early enough because they are often unable to take advantage of things like the pension plans in their home countries (for example, the Canada Pension Plan) because they haven’t been contributing like everyone else in their home country has. Essentially, we are on our own.
Update: that book is now finished!
The Wealthy English Teacher: Teach, Travel, and Secure Your Financial Future
People Who Don’t Work Abroad
The news is much better for those who have not been working abroad because you have probably been forced to contribute to a pension scheme of some kind and you are also eligible for things like free health care and old age security payments of some kind. In addition, you have hopefully taken advantage of things like matching retirement savings plans contributions from your employer over the years (you’d be crazy not to!).
It’s Still Not Great News if you Wait Too Long
Despite these additional benefits you’ll have if you don’t work abroad, the money that you’ll actually get in retirement is kind of subsistence level and even though you may picture yourself jet-setting around the world or playing golf every day or becoming a snowbird (the Canadian special), this is not the reality you will experience. You will be living in poverty, or pretty close to it.
The Takeaway: Take Care of Yourself!
So what am I saying? Everyone needs to save for their own retirement, especially English teachers and nobody should depend on the government for their retirement if they don’t want to live in poverty. Remember, the earlier the better so you can take advantage of the returns of the stock market over the long-term and the power of compound interest for the fixed income portion of your portfolio. By earlier, I mean in your 20’s and 30’s. If you only start saving in your 50’s or 60’s, you’ll be a pretty dire situation and can probably forget about those fabulous vacations and nice toys when you retire.