If You Don’t Start Saving for Retirement Now You May Never

Source: Thinkstock

Source: Thinkstock

There is always an excuse not to do something, and since multiple excuses are typically more self-assuring than just one, we have no problem conjuring up a wide variety to defend our own shortcomings. However, the hard truth is that if you don’t start saving and planning for retirement now, you may never begin.

Not enough money. Too busy. Tomorrow. These excuses might help you feel better today, but they will pillage and plunder your so-called golden years. A new survey from Northwestern Mutual finds that 58% of Americans believe their financial planning needs improvement, while 21% are not confident they will accomplish their financial goals. Yet 34% have taken zero steps in trying to secure their financial futures. Even worse, the majority of respondents say it would take a cash windfall to prompt better financial planning.

“Intending one thing and doing another is human, but it’s an impulse we should all fight hard to resist,” said Rebekah Barsch, vice president of planning and sales at Northwestern Mutual, in a press release. “How many of us know we should eat better and exercise more, but fail to take action? It’s similar with finances. We know it’s important, but we excuse ourselves – consciously or not – because it’s not easy. Of course, intentions only get us so far. And when the stakes are high, it’s taking action that’s critical. Some people might instinctively know they need to address their financial futures, but fear gets the better of them, and they ignore the issue, hoping it works itself out one way or another.”

Due to potential earning capacity, the money you save today is worth more than the same amount of money in the future. In other words, the longer you delay facing reality, the harder you make it on your future self to save for an adequate retirement. Life is always going to be filled with financial surprises. There is no perfect time to start saving for retirement, but each day you keep your head in the sand is a little worse than the previous.

Financial disruptions are a part of life. If you allow life’s untimely surprises to ruin your retirement aspirations, you’re doomed from the start. A recent study from TD Ameritrade finds that 66% of Americans have seen their long-term and retirement plans disrupted, with a loss of employment or having to take a lower-paying job as the primary reasons. The overall cost of disruptions is an estimated $2.5 trillion in long-term and retirement savings. Save during the good times so you’re better prepared for the aforementioned bad times.

You may feel like more money in the future will help you save better, but even that is no guarantee. Nearly one-third of households making $75,000 or more a year live paycheck-to-paycheck at least sometimes. Almost half of households in this income pool also admit that spending on entertainment and dining out causes them to save less than they should each month, and a third say a lack of financial discipline holds them back from achieving financial goals.

How can you start saving for your future self? Force yourself to save with automatic contributions, so money is automatically transferred from either your paycheck or checking account to a retirement fund. This helps remove the emotional connection we have with money and over time, you won’t even notice the transfers.

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