7 Excuses That Are Delaying Your Retirement

Time is the most vital element in building your nest egg. Start now, or pay later

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Antwone Harris®, certified financial planner and financial consultant for Charles Schwab, and Ted Benna, author of 401(k)s for Dummies who is commonly referred to as the “father of 401(k)s” explored some of the common excuses people make about why they don’t contribute to a retirement investment vehicle. They offered this advice.

1. I Don’t Make Enough Money.

“This is certainly true for some people–probably anyone earning less than $20,000 per year. Otherwise it is a matter of priorities. Tracking discretionary spending for only one week will show that substantial amounts are being spent on unnecessary items,” says Benna. “Someone who does this should be able to identify items to eliminate that will enable at least 1% of pay to be saved.” Of course, that is far from the amount that you need to save, but it beats not saving anything. The goal should be to move up from there in workable increments.

2. My Employer Doesn’t Match.

“The greatest benefit for most workers of a 401(k) plan isn’t the tax break or the employer match. It is the fact that savings takes place automatically each pay period,” Benna says. “Very few workers have the discipline to save outside the plan what they would be able to save through the plan.” Whether it’s a 401(k), Roth, or traditional IRA, retirement savings offer immediate tax deductions, tax-deferred growth on your savings, and usually a matching contribution from your employer.

3. I Have Too Much Debt.

“Set up a budget and stick to it if you don’t have one. Do not continue adding to your debt; get your debt load down to a level where you can contribute at least the amount that is matched by your employer ASAP,” says Benna. “If you have a match provision it’s a no-brainer; it’s 100% return,” says Harris. If you do not have a match it may behoove you to focus on the high-interest nondeductible debt first, but it’s imperative that you speak with a professional who can help you create a strategy to pay off your debt and secure enough funds for your golden years.

4. My Job Doesn’t Have a 401(k)

If you have your own business and are self-employed with no employees, Harris recommends an SEP IRA, which allows you to make contributions based upon the earnings from the business. If you have employees, Harris recommends a Simple IRA account. If you’re not self-employed, Harris suggests a Roth account first because contributions can  be withdrawn tax free at age 591/2. If you can’t do a Roth, go with a traditional, says Harris, but go with some type of vehicle that allows the growth to be tax deferred. If you choose to invest in an IRA, Benna suggests considering automatic monthly withdrawals from your checking account into your IRA if you have a tough time coming up with lump sum contributions.

NOTE FROM THE EDITORS: Some retirement plans have fees that can impact your performance over time. Review your plan with a professional.

Continue reading more excuses on the next page (and learn how to get over them)

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  • Ashley Vaughn

    I really hope people start paying attention to their retirement and actually take a hold of the reins. We must all remember that the only person that will truly look after you, is you! We must not rely on the government as they will be bankrupt soon.


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    BeTV ads on the right sidebar are annoying. After clicking on a few of the “MORE FROM OUR PARTNERS” links, I found that the articles, while substantive, are unreadable thanks again to the obnoxious ads.

  • Monica

    Something else to note is that many of us fall into contracts for basic luxuries and then we fell that it’s too much trouble to switch out of them. The result is that we keep paying for those monthly expenses routinely without realizing that all we need to do is spend a few minutes and switch out of them. Here are three basic samples that can yield a savings of at least $120 a month. (1) Switch from cell phone contract provider such as AT&T or Verizon to prepaid plan such as TracFone, which has one of the lower costs per minute at just 3 cents and incredible inter nation rates (same as local rates!). This can save you about $80 a month and the quality is sure to be the same if not better that the contract ball-n-chain vendors. With just $20 a month it’s easy to budget and to manage without much effort. (2) Switch out of the all-inclusive cable to basic cable. Do you really need 100’s of TV channels. Most of us have our 4 basic shows – don’t let them sell you on what you don’t want! This can save you at least $30 a month. (3) Finally, switch from Blockbuster for $21 a month to Netflicks for $8 a month – this even allows you to access your favorite tv shows or movies from your computer!