Why is saving for retirement considered essential?

Saving for retirement is considered essential because it ensures financial security in later years. As individuals age, the ability to work and generate income typically diminishes due to retirement or health issues. By setting aside funds specifically for retirement, individuals create a financial cushion that allows them to maintain their standard of living, cover living expenses, and address any unexpected costs that may arise during retirement.

Financial security during retirement is crucial for several reasons. It alleviates stress about having enough funds to support oneself when employment income ceases. It also allows for more freedom to choose how to spend one's time in retirement, whether that involves pursuing hobbies, traveling, or simply enjoying a comfortable lifestyle without financial strain.

The focus on retirement savings contrasts with other approaches, such as accumulating wealth for luxury spending or acquiring real estate investments, which do not directly address the long-term need for a secure financial future. Pay off existing debts before retirement can be part of a broader financial strategy, but it does not replace the necessity of having dedicated savings for retirement to ensure stability later in life.