Planning for retirement is a smart thing to do. However, it’s not always the most enjoyable activity. Reaching your
retirement savings goal requires some sacrifice now so that you can enjoy life later. Even though getting ready for your
golden years
means you’ll have to give up some things today, you’ll thank yourself
in a few years. However, not everyone thinks this way. Less than half of
workers in the United States (48%) said they and/or their spouse have
never attempted to calculate how much money they’ll need so they can
live comfortably during retirement, according to an
Employee Benefit Research Institute
survey.
Instead of focusing on the results, some people make excuses for why
they can’t save for retirement. Here are five of the lamest retirement
excuses people tell themselves.
1. I’ll work until I die
iZombie | The CW
If you reason that you can just put off retirement
savings
because you plan to work until you die at your desk, you might want to
rethink that plan. The odds of being physically unable to work at some
point in your life are higher that you might expect. Roughly
1 in 4 of today’s 20-year-olds will become disabled before they have a chance to retire, according to the U.S.
Social Security Administration. Sadly, many millennials say they expect to work until they draw their last breath. A
survey
of adults aged 20 to 34 conducted by Manpower Group found that about
20% of millennials believe they will have to work until their dying day.
2. I need to save for my kids’ college education
College fund | iStock.com
Your kids can get a scholarship for college. You, on the other hand,
can’t get a scholarship for retirement. In addition, your child can
choose a less expensive option for school or take on a side job.
Transfer some of the responsibility for college financing to your
children. It will teach them a bit of responsibility. The best gift you
can give your children is to not be a burden on them when you’re older.
In this situation it’s best to put yourself ahead of the kids. Don’t
feel guilty, they’ll appreciate it later. Financial adviser
Pedro Silva says many people put other major expenses before retirement and never get around to saving for the future.
People often cite car payments, child care expenses,
credit card, or college debt as primary concerns and retirement saving
as something to be done later. There is no way to make up for lost years
of retirement savings, and those who can afford to save the additional
amount later often take on too much risk to make up for the time lost.
We often picture our lives in the future as being different; we will
exercise, we will eat better, spend more time with our families, clean
out the basement, etc. The truth is the changes you wish to make have to
start today. Make a to-do list and write “call HR to start 401(K). Once
that is done, move on to the next item, realizing you are in control
and making choices to shape your future in the direction you want to go.
3. I’ll save when I make more money
Paying bills | iStock.com
Time is quickly ticking away. If you wait until you make more money,
you might be waiting for a very long time. Raises and promotions aren’t
guaranteed (neither is your job), so you might as well go ahead and
start socking away some cash now. The longer you wait to save, the less
time your money has to grow, so it’s wise to start saving as soon as
possible. If you delay saving for retirement until you’re 35 years old,
you’ll need to save more than
16% of your income
each year just to produce the same potential retirement income at the
age of 65 as a worker who started saving 10% of their income starting at
30 years old, according to the Insured Retirement Institute. If you
decide to wait until 40 years old, you would have to save more than 26%
of your income.
4. I can’t afford to save for retirement
Money in a wallet | iStock.com
Saving for retirement means you’ll have to give up some comforts right now, but you really can’t afford
not
to save for retirement. If your finances are tight, work on developing a
budget so that you can make room for retirement savings. Your future
survival could depend on it.
Howard Dvorkin, CPA and Chairman of Debt.com said the people who
claim to not be able to afford retirement are usually the ones who are
wearing most of their money in the form of expensive purchases:
The lamest excuses I always hear are the unsaid ones. I
meet someone who tells me they simply can’t afford to save for
retirement, as they look at their Omega wristwatch and climb into their
leased BMW so they can pack for their vacation to the Bahamas. Yes, many
Americans are struggling and simply have trouble making ends meet, and I
respect and work with them. But I meet many other Americans who earn
quite enough to meet all their obligations – but they spend frivolously
without ever admitting it to themselves.
5. I don’t know how much to save
Thinking young woman looking up at many question marks | iStock.com/SIphotography
There are plenty of
retirement tools available that can help you figure out
how much cash to put away.
This is one of the worst excuses for not building your nest egg. These
tools allow you to create a retirement budget, figure out life insurance
needs, estimate retirement income, and more. As a general rule of
thumb, you should aim to have at least one times your salary saved by
age 30, three times by age 40, seven times by age 55 and 10 times your
salary by the time you reach 67 years of age, according to
Fidelity.
Culled from Money & Career Cheat sheet
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