Retirement planning isn’t what most Americans are interested in.
Like most Americans, you’re likely going to overlook the $16,122, even more, each year. The Social Security bonus that subconsciously promises a most sought-after peace of mind when you’re of optimum age retiring from work. At your convenience, it boosts confidence that there is that financial security to lean on at the prime of your life. But this is the least we can think of among the reasons― if not excuses― on why a typical American falls short of saving for retirement.
As statistics update shows, 42 percent of Americans have less than $10,000 saved for retirement while approximately 14 percent have not a single penny set aside for the rest of their lives at all. As GOBankingRates states, a minimal 16 percent of working adults are capable of having at least $300,000 in retirement savings. Nevertheless, one-third of baby boomers have less than $10,000 in the retirement plan. Relatively, America’s health care costs are expected to soar as baby boomers become senior citizens by then. Hence, saving earlier, the better.
Let us take a look at the following reasons to name a few, while logical personalities dismiss the concepts as mere alibis:
Having not enough money to save
One of the excuses why many Americans don’t consider early retirement planning is that they don’t have enough money to save.
Regardless of how meager your salary bracket might be, setting aside a minimal $100 per month savings over a 40-year period invested at a 7 percent average annual return makes a whopping $240,000 after four decades. Small contributions make a difference. Double the effort and get more amazing results. Time will reveal such benefits soon.
Struggling to pay bills
The secret formula: lower your bills. It suggests a more logical approach toward living by your means, which opens up a door for some retirement savings―soon a blessing in time. Never allow your expenses to go out of control. The idea somehow eases up financial pressures at hand. Hence, go over your purchases list, try to figure out which goods are ideal so as to dump the rest of lesser importance. It is rather a more competent decision to retire with dignity than lose track and experience the old age maladies unprepared. If you do not save for the rest of your future, who else will?
Give priority to paying off debts
A lot of Americans will put more priority on paying their debts than financial planning for retirement.
However, it sounds smart to pay off debts if the interest you pay is higher than the interest you earn. But take advantage of your earning years. Actually, you can take both funding schemes by heart. Nevertheless, if you ignore saving for retirement in the process of paying off debts, you will risk having inadequate funds during your twilight years when the financial position withers. That could lead to more debts later in life. You have to set the balance for both obligations to work either way on a 50-50 approach to settle both. Virtually, this would make sense.
The job doesn’t offer a retirement plan
This is not a valid excuse to neglect financial planning for retirement. Anyone with earned income can save an individual retirement account (IRA). For one, the financial institution that sets up the IRA caters a tax-free growth or a tax-deferred basis. The idea saves some dime upfront and, with due courtesy, to the most probable elderly woes. Making a slight cut on your present expenses isn’t a pain in the neck, though, while the logic behind it all serves a moral responsibility to gain advantages aimed for the prime of your life needs.
No need for retirement savings
A good number of Americans bet that let alone the Social Security benefits can shoulder their basics and payables when they stop working. But this doesn’t sound right all the way. Social Security is basically aimed to replace but merely 40 percent of the average worker’s pre-retirement income. Let’s face what most of the elderly will go through. The elderly need more than just sound meals, maintenance medicines, and bill payments.
This is the time in one’s life wherein positive attitude to every situation is never enough. Depression will take its toll hitting your heart and mind for real. Health challenges are most probable. So, get some life. A good approach to fulfill life at its best is to schedule at least a travel or two per year. A week or month long travel within or out-of-the-country is awesome. It adds years to your life—but an added burden to your pocket. Save now!
Always remember that retirement planning starts long before you retire. The amount you need to retire comfortably is highly personalized, but the idea of how much to save for retirement depends on your income threshold, though. The bigger you save, the more comfortable you will be when a sedentary lifestyle when you age becomes a fallback position instead of taking the dynamic, upbeat option. By that time, you’re no longer paying in, instead, your decades of saving are paying off.