Retirement saving is one of those things most of us think about only conceptually.
Maybe it is because we do not like thinking about ourselves getting old. Maybe it has to do with a lack of education on how much we will need in retirement.
Whatever the case, complacency is not the answer. Saving for retirement is not only a smart thing to do, but it is crucial if you do not want to find yourself broke during your golden years.
There are many reasons and excuses people make in not saving for retirement. However, none of them stand up to logical inspection.
See if you can recognize your set of excuses from this list.
1. There is always Social Security.
Depending on how old you are, Social Security may not even be around when you reach retirement age. The current amount allocated for Social Security is not enough to keep the fund solvent beyond 25 or so years.
While this may vary slightly up or down, no one can argue that Social Security is not very secure.
2. I have too much debt.
While this may be true for many Americans, it is still not a valid excuse not to save.
Treat your retirement savings as another bill you must pay each month. It is best if you have that money deducted from your paycheck or otherwise automatically deposited into a qualified retirement savings plan.
3. I am afraid of losing my money in the stock market.
Given the recent economic and stock market troubles, this is a valid fear. However, it is still not a reason to forgo retirement saving.
When saving for retirement, you have to look at the long term. No other asset class has outperformed the stock market over the long term.
“It is never
too late to begin.”
4. My employer has no retirement plan.
There are alternatives to employer-sponsored retirement saving plans. A personal IRA can be opened by anyone, with as little as $50 or $100 initially.
Once set up, you can add to it over time. There are even IRA accounts that earn money tax-free. While employer retirement plans like a 401(k) are nice, they are not the only way to save.
5. Investing is too complicated.
For many people, this is probably true. However, there are many resources available to teach yourself at least the basics of investing.
If after trying to learn these you are still uncomfortable, there is help available from retirement plan specialists. Any large investment brokerage will have advisers available for low or no fees.
6. I will start saving after I get that raise/promotion/new job.
This is one of those perpetual excuses that guarantees you will not begin saving for retirement.
If you are always waiting until you have a little more money, that day will never come. In fact, the best time to begin saving is right now.
7. I can’t afford to save money for retirement.
As with waiting until you get a raise or promotion, waiting until you can afford it is a fool’s game. That fact is you can’t afford not to start saving now, regardless of what excuse you give.
8. I am still young and have plenty of time.
This is one of the easiest stories to tell yourself when you are first starting out. It is hard to imagine retirement and saving for it now seems like a waste of money.
However, I am here to tell you it comes sooner than you think, and by building good saving habits now, you will have a head start over most of your peers.
9. It is too late to start.
At the other end of the spectrum is this excuse. If you have not started saving for retirement and you are in the middle of your career, do not panic. And by all means, do not just choose to ignore the issue.
Rather, evaluate your budget and apply every bit you can spare into your retirement account. At the very least, you may defer some taxes and will be building what you can for your eventual retirement days.
I hope these tips were helpful to anyone who has not yet started saving for retirement. It is never too late to begin. There are resources out there to help you, but you have to put away those excuses.
Photo source: businesscoachingprofessionals.com.