Why Are you Not Saving For Retirement?
I will start saving my money for retirement when…my student loans are paid off, when the house projects are completed, when the kid’s college is paid for, when I get a raise…the excuses and reasons are limitless as to why you aren’t saving for retirement diligently. In a recent survey by the employee Benefit Research, over 54% of Americans have less than $25,000 put aside for retirement. As the excuses pile up, the reality of the matter is, Americans will not enjoy a full and wonderful retirement unless they get their act together in retirement saving.
The Six Most Common Reasons Americans Are Not Saving For Retirement
1. Paying For Kids College Is Delaying Retirement Savings
As the cost of higher education is on the rise, many parents have felt the responsibility of helping their kids save for college. Unfortunately, in most homes, paying for college has come at the expense of retirement planning. For students, even though it may be unpleasant, there are always the options of scholarships, grants and student loans. Retirees don’t have the option of taking out a Federal loan for retirement. It’s either put money aside, or don’t retire. If it’s your children’s well-being you are concerned for, imagine how your child will feel if you become a burden later in life because you didn’t adequately prepare yourself for retirement.
2. Don’t Bank On A Bad Gene Pool As An Excuse Not To Save For Retirement
One of the biggest mistakes people can make is making the assumption that they don’t need to save for retirement because they will probably die too young to need to retire. Just because dad or grandpa died at 60 of a heart attack, is no reason to assume that you will follow the same pattern. With improvements in modern medicine people are living longer and healthier than ever before. The worst case scenario is the penniless 99 year-old who didn’t adequately prepare for his retirement.
3. Don’t Plan on Relying Solely On Social Security For Retirement Savings!
Have you been watching the news recently? According to the most recent data, Social Security is currently projected to run out of reserves by the year 2037. Unless something is done by congress to change the deficit in funding for social security, younger Americans can only expect 75% of their benefits at best. The current benefits awarded to seniors are just barely above the poverty line. When that decreases, seniors will need their own savings to draw from just to make ends meet in retirement.
4. Working Forever Is Not A Retirement Plan
Even though you may think you have no desire to retire and plan on working until the very end, many things in life are outside of our control. The number one reason people are forced to quit working early is due to health problems for themselves or a loved one. A co-worker of mine, for example, planned on working until she physically couldn’t work anymore. At 70 years old, she was forced into “early retirement” when her husband became very ill and she had to stay home to care for him. In her situation, she would have never planned on that being an issue, but it’s essential to have a retirement savings to fall back on in case life happens and you are forced to retire.
5. I have Too Many Expenses Right Now To Save For Retirement
The next big excuse, is that life is too expenses and that it’s impossible to rob from current expenses to salt away money for retirement. If you’re in this situation and you are just too strapped to think of even one more financial outlay, your solution may be the old-fashioned budget. By putting yourself on a strict spending budget, and working hard on credit card debt, you may be able to find a little extra to put towards retirement.
6. Unemployment Is Preventing Me From Saving For Retirement
Of all the excuses, this is probably the most legitimate and most difficult to work around. If you’re income has stopped due to unemployment you may have no choice but to put retirement on hold for the meantime until you find another job and begin making an income again. Once you are back on your feet, kicking it down and saving hard for retirement will be essential.
The point of the matter is, there are always reasons why saving for retirement is “impossible”. However, I’d like to encourage you to make it a priority in your life. Begin this month, setting aside money each and every pay period to put towards your future. When you reach retirement age, you will be so glad you took the time to plan ahead. For more information on obtaining financial freedom in retirement and how to manage your retirement portfolio, speak to a Redhawk Wealth advisor near you today.