7 Reasons We Aren’t Saving For Retirement
We all know we should be saving for retirement. Our advisors, friends, and parents tell us. This website you’re reading now has told you, as has any page of the business pages. Yet we can’t seem to do it, beyond the compulsory superannuation contributions. What might be stopping us from saving for a well-rounded (and funded) retirement, and what can we do to stem the drain?
Living Beyond Our Means
In America- according to Yahoo News- most people (47%) say they are saving between one and ten percent of their income, while 25% save more than that. They are pretty encouraging stats. Any saving is a step in the right direction, and the crucial part is setting a savings pattern that you can sustain. However, 25% of people also say they can’t save any money because they spend all their income. Sometimes, it seems impossible to cut anything else out of your life but if your paycheck and expenditure are equal (or, even worse, expenditure exceeds paycheck), you need to reevaluate your budget.
Not Saving Automatically
Direct debits are a godsend to savers. Superannuation, by and large, works because we don’t have any manual payments that we can stop if we want to. Except for the occasional wince at our pay slips, we just suck it up. The same goes of direct debits- out of sight is out of mind, and your savings will increase with minimal pain. If you have special circumstances pending and need the extra cash, you can suspend the payments and set the date that they should renew.
Not Negotiating
There is a minimal super requirement for bosses, but that doesn’t mean you can’t negotiate a higher one as part of your salary package. If you need to bolster your retirement savings, next time you negotiate your wages, think about asking for higher employer super contributions to be included.
Too Much Debt
Debt can cripple your ability to save for your retirement. Not only can bad debt hamper your current standard of living, if you don’t get on top of it now, it could make your future quality of life much trickier. 20% of Americans have debt they are unable to reduce or that is growing. Getting on top of your debt, and saving simultaneously, will improve your chances to save a nice nest egg to retire on.
Saving Isn’t A Priority
With the current cost of living, debts and consumer lifestyle, saving can come pretty low on the to-do financial list. Money cannot be divided into a million different directions. That said, chipping away in a couple of different directions is better than postponing one in entirety. Saving and reducing debt, while maintaining a reasonable standard of living, may sound impossible but with discipline and a well-developed budget, it can be done.
No Emergency Fund
Living without an emergency fund might seem a no-brainer when things are peachy, but they can damage your retirement savings if anything should go awry. If you don’t have an emergency fund set aside, you might have to dip into the nest egg, taking away from your overall savings.
Windfalls Get Swept Away
Sometimes, people get financial windfalls. Unexpected tax returns, or inheritances for example. This will often initially get stowed away as savings, but then spent. Why not add it to your retirement saving and give yourself a bit of a savings buffer in the years to come?
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