Many people put off saving for retirement just because it is so far away. They think they will have time to start saving in 5 or 10 years. After all, 30 years into the future is long time away. Others put off saving for retirement because they are in debt. They have been told that debt is bad and they need to get out of it as quickly as possible. While this is true, saving for retirement today is still important. What excuses are you making to avoid saving for retirement? Here are some common excuses and why you need to save for retirement.
Excuse: You’re In Debt
Let me be clear, getting out of debt is important to your financial health. But you have to be smart about digging yourself out of it. Many times we find we dig out of debt just to be right back in a mountain of it a few years later. I know because I was one of those people.
Figure out why you are in debt. The problem is that the debt cycle repeats itself because we never get to the root issue. For me, I thought I just had a spending problem and would go in spurts. Pay off debt, get back into it. It wasn’t until I looked within myself and admitted I was lacking in self-esteem and I was depressed. Buying things made me feel good. When that “high” wore off, I bought more to feel good again. When I confronted these issues, I was finally able to overcome my debt.
Save enough to get the company match. If you are in debt, chances are you will struggle like I did until you are able and willing to look within to see what the real problem is. This could take a few years. During this time you can easily save money for retirement. In fact, you can get away with just saving a small amount – enough to get your company match – and still be making progress.
The match your employer gives you is essentially your money. You get it when you save. If you don’t save, you are missing out on free money. It boggles my mind why so many people skip free money. If you tell me you’ll give me $20 if I save $100, you bet I’m taking that deal. And you should too.
Excuse: You Only Have a Few Dollars
I know a few bucks here and there appear as though they won’t make a difference. But they do. Even if you only save $1,000 a year for 30 years and earn 6%, you end up having over $80,000 saved. I know it isn’t a million bucks but would you rather have $80,000 or nothing? I’ll take the $80,000 any day of the week.
Every dollar adds up. I encourage you to save something, anything to your 401k plan. Any money you save for retirement is money you otherwise wouldn’t have to live off of come retirement.
Excuse: The Stock Market is Too Volatile
Another issue I see many face is the fact that they give into the short-term movements of the stock market. They see the market drop, get scared and run. Some build up the courage to invest again, most times after the market has turned the corner and has been rising for a while. Others remain too scared and simply avoid the stock market.
You can make money investing. When you invest, you have to take a long-term outlook. Over the short-term, the market will jump around, rising and falling. But over the long-term, the market moves higher. Look at any chart as proof and you will see that as time passes, the market moves higher.
Stay invested for the long term. Now, I realize that looking at the long-term is easier said than done. But you have to take the steps to keep this in mind so that you don’t sell and hide when the market drops. You need to stay invested for the long-term and find ways to handle stock market volatility.
If you had stayed invested after the crash in 2008, you would have made your money back and then some. When the next crash comes, and it will at some point, you need to stay invested again and in time, you will earn your money back and then some again.
Learn and understand how the market works and stay invested. If you can do these things, you will be better off financially.
Regardless of your financial situation, you have to start saving for retirement today. Every little bit helps and it is more than you otherwise wouldn’t have had you not saved it in the first place. I know how easy it is to fall into the trap of telling yourself you will start saving tomorrow. But you can’t fall into this trap. You know how fast time flies, how it is suddenly fall already or how fast the holidays sneak up on us.
Before you know it, you will be staring down retirement with nothing saved and will have little hope to build any size of nest egg. Start saving today so that you don’t have to face this reality in the future. Do yourself a favor and avoid the stress and worry about what your life will be like financially when you are older by saving something, anything, today.