The 3 Real Reasons You Are Not Saving for Retirement

why can't i save for retirementIn a recent survey I asked why people were not saving for retirement.

A whopping 51.6% said that it was because they did not have enough money.

I compare this to the reason behind why many people do not exercise – not enough time.

Because even though we know that both are important and will help us be more prosperous and healthy.  We still never find the time or money to save or exercise.

How does this disconnect from what we know is important and what we actually do happen?

There are three problems that cause this disconnect: time perspective, investing knowledge, and setting priorities.

Time Perspective

Time perspective is how you look at the world, do you focus on the past, present or future.

Most of us are a blend of these but we lean more to one.  I myself am a future perspective, which means that I tend to focus more on the future than today.  Each perspective has different pros and cons.

(To learn more about time perspectives check out this book: The Time Paradox.  A wonderful read and every eye opening!)

The biggest issue facing non future oriented people is that it is harder to plan beyond today.   Thus you don’t see retirement as a problem to worry about; it is just plain too far off for you to think about.

So how do you overcome this?

First, try to visualize what you want from life when you are done working.  What do you want to do, what do you want to buy, what does your day look like?

This may be easier if you do it as a chat with a friend. Talk about what would be your ideal future. You can even try journaling.

Once you have decided what your retirement will look then you need to asses if you can afford it. If you find that the answer is no, then either increase your savings or get started saving.

Knowing How to Invest

You want to start saving more money for retirement but you just do not know how to get started.

This is completely understandable.  Most of us are not taught anything about investing while we are growing up.

So how do you get over this hurdle?  Slowly and Steadily begin to educate yourself about investing.

While this will take effort and time,  it is more than worth it to be able to understand what your adviser is saying. Knowledge is power.

I recommend that you begin by trying to read about investing in small chunks, try 15 minutes a day to start.  Grab a magazine, a book, a blog, a website, whatever you are the most comfortable with.

Eventually you will begin to understand more and more of what you are reading.  Before you know it you will be ready to invest. You may even be interested in real estate, and you can contact people who want to sell the home to an investor, like yourself.

Setting Priorities

We make decisions everyday that show what we consider a priority in our life.

We have a choice in everything that we spend time on and spend money on.

If I choose to watch TV for an hour instead of taking a walk then I choose that exercise is not my priority.  Likewise if you choose to eat out more, then the priority is on spending and not on savings.

Sometimes it can be hard to be honest with ourselves about the choices we are making.  It is not easy to buy a smaller house than you want so you can put money aside for some far off later date.

Life is not always full of choices that are easy; sometimes the hard choices are the ones that will take us further in the long run.

Stop and ask yourself what is more important: being able to retire without stress or ordering pizza instead of cooking?

Remember you choose what you want to focus on and how you set your priorities.  Decide what is really important to you and do that!

Is one of these three things stopping you? Take steps today to change them and start saving for retirement.

Barbara says September 27, 2013

I think when people say they don’t have enough money, they mean either that they can’t even meet their current bills or they don’t have enough to save meaningfully. Sure, I’ll concede $100 per month is better than nothing, but if $100 is all a person has to save, that is not going to cut it. Unlike with exercise, these articles dance around the problem of many people just not having enough income. Especially not enough income to support 30 non-working years (65-95) on only, say 35 working years (e.g., finishing grad school at 25 and five combined years of unemployment over the course of the career for illness or caregiving or job loss).

    Andrea says September 27, 2013

    @ Barbara – thank you for commenting! While income can be an issue with many in that they are just not making what they are worth, there are many stories available of people who save large sums on a very small income. It is about choosing how we spend our money while maximizing what we make. I also think, we will need to extend the time we work if we are healthy enough to do so. Every extra year of savings is worth the time. Our ideas on retirement may also need to change for us all to be financially successful. For more on that: Saving for Retirement in a Broken System

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