[Guest post by Jane Miller]
Saving for retirement can seem impossible, especially when you have costly bills piling up to the ceiling. But just because you have expenses and obligations today, that doesn’t mean you shouldn’t plan and prepare for tomorrow. Many people aren’t taking this advice, though, making excuse after excuse about why they haven’t been saving for retirement. Here are seven of the most common ones.
I Don’t Have Enough Money
If your number one excuse for not investing in your retirement is that you don’t have enough money to do so, then it’s time for a reality check. Investing in your retirement doesn’t require a lot of money, but it does require patience and consistency. Most 401(k) retirement accounts let you make small monthly contributions, with no federally mandated minimum amount expected of you. Most employers let workers contribute as little as 1 percent to their 401(k) plan.
There’s Plenty of Time
You may think there’s plenty of time, but before you know it, you’re old and gray without a penny saved toward your golden years. The longer you wait to save for your retirement, the harder it’ll be to save enough for it. Remember that the vast majority of your retirement savings doesn’t come from the money you’ve invested, but rather the interest, capital gains, and dividends you’ve earned from the money you’ve saved.
Investing is Too Complicated
There’s no doubt that investing can get a little complicated for people who have never done it before, but that doesn’t mean you can’t learn and try it out. With a 401(k) and a simple phone call to the plan administrator, you can receive help picking a few mutual funds that’ll offer enough diversification. There are various companies out there that will make it simple to save for retirement with a single mutual fund. Lifetime funds let you diversify into U.S. and international bonds and stocks with a single investment.
It’s Too Late to Make a Difference
The longer you keep making the excuse that it’s too late to start saving for retirement, the less money you’ll have when it’s finally time to retire. Every dollar counts, so it’s wise to start as soon as you can, even if it’s just a couple of dollars here and there. By spending less and saving more, you’ll avoid having to work past your late 60s. If you do start saving late, make sure you have a feasible plan in place that’ll get you the most out of your time and money.
I’m Scared of the Stock Market
The volatility of the stock market is intimidating. However, there are a few ways to help ease your stress and calm your nerves. Investing in low-cost index funds, as opposed to actively managed funds, ensures that your losses are the result of general market declines and not bad decisions by a manager. Also, remember to adjust your asset allocation to include more fixed-income funds like bonds or annuities. For more information, check out the pros of variable annuity guarantees.
I Don’t Have Access to an Employer Retirement Plan
Although having access to retirement plans like a 401(k) or 403(b) at work makes retirement planning a lot easier, especially if your employer matches your contributions, there are other options if you don’t have access to a retirement plan through your employer. Opening an IRA, or individual retirement account, is relatively easy. With this account, you can set up automatic contributions from a checking or savings account.
Saving for retirement isn’t easy, but that doesn’t mean you should put it off until the last minute. Balancing your budget to account for your bills, debt, and retirement fund is the best way to plan and prepare for a financially free future. Although it may not seem like it at the moment, it’ll be worth it when you’re in your 60s and ready to enjoyment your retirement in relaxation.
How are you going about saving for retirement? Have you had trouble doing it? Leave us a comment below and let us know what you think.
Jane Miller is a freelance writer who loves to write about anything from tech to mommy stuff. She is featured in many blogs as a guest writer, and can write with authority on any niche or subject.