7 Common Excuses for Not Saving for Retirement
In a perfect world, everybody would consider a Self Managed Super Fund while they’re young and healthy enough to work for their retirement purposes. Unfortunately, many people wait until they’re well into their forties or fifties before they even give their retirement plan a thought.
They come up with many different excuses for not saving for their retirement. While some of the excuses might be understandable for a short period of time, nothing is excusable about putting off a retirement savings plan for years or even decades.
Here are seven common excuses used by people who don’t save for retirement:
1. “I don’t make enough money to save.”
You don’t know what the future holds. You might make even less money in the years to come. Even if you can only afford to save a few dollars here and there, that money will add up over the next 10+ years.
2. “Social security will cover everything when the time comes.”
This day and age you can never be sure about social security. Even if it is there for you in the future, you don’t want to take any chances. Never depend entirely on one form of income, or you’ll be in trouble. Besides, your Centrelink benefits might not cover all of your expenses.
3. “I’m too old. It’s too late.”
It’s not too late as long as you are still working. Did you know that older workers are allowed to contribute more money to their retirement fund than younger workers? There are additional tax breaks for older workers as well. Talk to a professional to help you get started.
4. “I have too much debt to worry about.”
Most people do these days. That doesn’t excuse anything. Tighten up your budget. Get a second job if you have to. Make a list of every single thing you buy, even if it’s just a cup of coffee. Cut out as many of your expenses as you can.
5. “I don’t even know where to begin when it comes to investments.”
The average person doesn’t know a whole lot about investing. It might be an unsettling topic for you. Nevertheless, you should still educate yourself about the basics. Learn about retirement funds and SMSF‘s.
6. “I’ll just put saving for retirement off until I’m much older.”
You’re never too young to start saving for retirement. The sooner, the better. Anything can happen in the coming decades. The more you save, the easier you will have it after you retire. You’re only hurting yourself by not investing at a young age.
7. “I’ll cut expenses after I retire.”
No you won’t. You’ll have more time on your hands. This extra time means more trips to the shops, more eating out, more going to the movies, and so on. According to studies, retirees need 70-80% of the money they earned when they were working in order to enjoy the same lifestyle.
There is no excuse for not saving for your retirement. Even if you have to make a few sacrifices now, you will be happy that you did so later on in life.
This information is intended to provide background information only and does not purport to make any recommendation upon which you may reasonably rely without taking specific advice. In particular it should not be considered financial product advice for the purposes of the Corporations Act 2001.