We have all heard them and most of us have had occasion to give a few. Excuses are a means of rationalizing behavior we think may be controversial. For those on the receiving end, they can be a source of humor or disgust. One thing is for certain, people have a lot of excuses for not saving for retirement. Here are six of them:
1. I am paying for my child's college education. There are many ways to fund your child's education, including student loans, scholarships, grants, and other means. There are very few ways to fund your retirement. Retirement should be a savings priority.
2. My parents died young. Dying young is not a retirement plan and cannot be relied on. People are living longer today than ever before, and the trend is expected to continue.
3. I will live on Social Security. According to the 2010 trustees report for the Social Security Administration, the reserve will run out by 2037, and projected tax proceeds should cover about 75 percent of benefits through 2084. If Congress does nothing, younger generations may receive lower benefits than expected.
4. I will always work. A day may come when you are not able to work anymore. About 40 percent of people retire earlier than expected. Almost two-thirds of them retire because of poor health or a disability.
5. Too many current expenses. The only cure for too many expenses is old-fashioned budgeting. Always pay yourself first and, if there is money left over, splurge on the things you want. Don't think about what you are missing today; think about what you will get in the future.
6. I am unemployed. Losing your job is not uncommon today. While unemployed, you may have to cut back or stop saving all together. Once you find a new job, make sure you start saving for retirement immediately.
If you have been excusing yourself from saving for retirement, it's time to take action. Join your employer-sponsored retirement plan, open an IRA, or call us for additional suggestions about how to save and invest for your future.
Employee Benefit Research Institute, 2011 Retirement Confidence Survey, March 2011 (http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=4772)
The above material was prepared by Peak Advisor Alliance.
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