Top 5 Excuses Not Saving for Retirement

Planning for your eventual “unemployment” takes time and focus. However, many people under-prioritize this and/or bury their heads in the sand. Fact…it’s not going to go away, probably no one is going to step in and do it for you, you are not likely to win the lottery, Social Security funding is waning, you are under-estimating your future medical expenses (or conversely over-estimating what Medicare will pay), and I am pretty certain you are not figuring 4% inflation into your calculations.

Recently I put up a post suggesting people often find excuses to not save/ plan for retirement. Formerly being one of these such people, and still struggling to save, I thought I might address these particular excuses I referenced then. This has been adapted from a very informative article by John Ingrisano. Here goes:

  1. The “I’m too young” excuse. To put aside any sizeable amount of savings is difficult, but virtually impossible, unless you embrace your friend…Mr. Compound Interest. Time is both your ally and your enemy here. You must take advantage of your interest compounding, untouched by you, to grow your $$$. Example, if you save $100 a month for 40 years at 5% annual interest, you will have more than $150,000 waiting for you at 65. Delay just 10 years, and you cut it virtually in half to less than $84,000.
  2. The “I don’t make enough” excuse. There is never enough. That is why you should budget and pay yourself first…always. In the talk of assets, people rarely take into account that they are their own biggest asset. Insure yourself fully, and each month pay yourself as you would any invoice due.
  3. The “I’ll have Social Security” excuse. Well…maybe, probably, not sure. In March 2014, the average monthly retirement benefit was less than $1250. Can you live with that as your monthly “paycheck” in retirement. Worse yet, factor in a 4% inflation rate and looks even worse. How will you travel or spoil the grandchildren?
  4. The “I don’t plan to retire” excuse. Well good on you…but I am pretty sure that “the die at my desk retirement plan” is both full of holes and while OK to say at 50, is a lot less appealing at 70. How can you assume you will even be in any shape to work at say 75?
  5. The “I’m too old” excuse. It is never too late or too early, especially if you are still working. It’s not all about you, as I tell my kids from time to time. Leave something for your family why don’t you. Our legacy is those we leave behind.

It always bears repeating…if the best time to start saving was 20 years ago, the 2nd best time to start is today.

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