We all have hopes and dreams for retirement — traveling, relaxing, playing golf every day. Personally, I see myself sitting on a beach after a morning of wetting a line (a.k.a. fishing)… basically enjoying the vacation life every day. However, unless you take necessary steps you simply won’t be able to retire to the full lifestyle they often picture in TV commercials and magazine ads.
According to a recent survey, half the households in America have saved less than $10,000 for their retirement income. Whether they’re just overspending or planning to live off Social Security, most people aren’t saving enough to retire plain and simple. So what’s the reason for this trend?
Most people graduate from college and/or enter the workforce in their early 20s. Between their early 20s and 30s, people seem to focus on finding new jobs, buying their first houses, getting married, and having babies rather than on saving for retirement. Somewhere between their 30s and 40s, though, people start making more money–maybe they get a pay raise at work. Yet, instead of looking toward retirement, they take on BIG DEBT, buying brand new fancy cars, big fancy toys, and big fancy houses.
All of a sudden, people get into their late 40s and early 50s and realize they should start saving for retirement. But now, they’ve only got 10-15 years to save before their bodies give out. They hit their mid-60s and early 70s without enough money saved to enjoy the life of leisure they wanted, but now, it’s too late to save more. Here’s what they didn’t realize:
Instead of building wealth, many people give it away. Specifically, they spend it on interest and taxes. Here’s how:
People also transfer their wealth to their kids when they aren’t very diligent or prudent with their money or when they spend exuberant amounts on unnecessary items.
We live in a society where most people don’t prioritize their goals. If they do, they don’t keep their aspirations in the proper place. Rather than prioritizing long-term goals like saving for retirement, many people prioritize short-term goals like saving for vacations. In the past, companies helped with this by offering pensions, but those days are gone, and employees are left to take care of their own futures. Yet, these things get in the way:
Looking at this list, it’s easy to see why many people will never retire to a life of leisure. Unless you take initiative to save for retirement early, keep your wealth in your own hands, and make long-term goals your priority, you will likely retire from one job only to go to work at another. And given today’s Social Security issues, it may not be the wisest decision to let the government control the majority of your income in the future. Therefore, it’s time to start taking care of your future. Move it back to the top of your priority list.
RECOMMENDED NEXT STEPS: Head over to our Income for Life retirement series where we give you tools to help you retire the way that’s best for you.