12 Reasons Why Retirement Isn’t in Your Vocabulary

Are you prepared for retirement? If you’re like 64% of Americans, you are not. And, that means you’re going to spend the latter years of your life broke. Here are 12 reasons why retirement isn’t in your vocabulary.

Why are we doing this to ourselves? Because thinking and planning for retirement aren’t always fun. It can also be overwhelming. And, maybe that’s why we make excuses to delay it for as long as possible.

But that’s not really in your best interest. That’s why you need to ditch the following 12 reasons for ignoring your retirement and adding it to your financial vocabulary.

1. I don’t know where to start.

That’s a valid point. But, you wouldn’t use this as an excuse for another facet of your life.

You don’t know how to change the oil in your car or make sourdough? You would look it up. Do you have electrical or legal problems? You could contact an electrician or lawyer.

The same is true when it comes to your retirement. Start doing some digging on your own, such as which contributions are available to you from your employer or the self-employed.

You could also learn more about retirement by reading books, listening to podcasts, or following blogs like Due. And, definitely pick-up the phone and give your financial advisor a call ASAP.

2. The timing is off.

There’s a well-known saying from Hillel the Elder that you may be familiar with. “And if not now, when?” I think that’s appropriate when it comes to retirement.

If you’re in your 20’s, you may think that because retirement is so far off, you can delay it. On the flip side, if you wait too long, you may decide not to bother with it all.

The truth is, you need to start planning for your retirement sooner than later. After all, it’s recommended that you have at least $1 million saved for retirement. And, that might not be possible if you’re in your 50s or 60s.

The good news? The younger you are, the more time you have to build your retirement fund. And, you can start small, even if it’s $25 a month.

What if you’ve been putting this off?

“Let’s say you’re 40 years old with a $55,000 salary and nothing saved for retirement,” writes bestselling author and financial expert Chris Hogan. “I recommend you save 15% of your gross income for retirement, which means you should be investing $688 each month into your 401(k) and IRA.” If you’re able to do this “for 25 years, you could end up cracking the $1 million mark at age 65. That’s right—you would be a millionaire!”

What if you’re older than that? Take advantage of your age, “because a higher salary usually comes with it,” adds Hogan. “People age 45–54 are hitting their peak earning years, with the typical household income running a little more than $84,000 a year. If you invest 15% of that, you’ll be putting away $12,600 a year for retirement!”

Hogan also suggests that you look for savings in your monthly budget, find ways to increase your income, like a side hustle, and paying off your debt like your mortgage. You could also put off retirement for a couple of years as well.

3. My schedule is too full.

Between your work and personal responsibilities, there isn’t much time left over to plan for your retirement. That’s understandable. But, it’s also another alibi.

Sure. It’s going to take an initial time investment to develop your retirement plan. But, a bulk of the work is going to be handle by a financial and/or robo-advisor.

Does that mean you can set-it-and-forget? Of course not. But, once your plan is in place, you really only need to check-in on it once a year. Add that to your calendar, as you would with your annual check-up with your physician so that you can make time.

4. I want to play now.

“Of course, you’ve heard this excuse before,” says our friend Chris Hogan. “You probably said it when you were a kid! Who wants to do grown-up stuff like chores and homework when there’s so much more fun stuff to do?”

“Guess what?” asks Hogan. “You’re a grown-up! That means you get to do grown-up things, like planning for the future.”

“If you don’t take retirement seriously now, you won’t be able to play when you get older,” adds Hogan. Why? Because you’ll probably still be working.

And, while that may not register today, just know that we’re living longer than ever. In fact, the current life expectancy in the U.S. in 2020 is 78.93 years. I don’t know about you. But, I don’t want to be stuck in the rat race at that stage in my life.

5. I’m living paycheck-to-paycheck.

According to a 2020 Highland Solutions survey, 63% of respondents said that they’re living paycheck-to-paycheck since the pandemic struck earlier in the year. Why worry about retirement when you’re barely able to cover the essentials, like food and housing?

Hopefully, things will bounce back in the near future. And, if you’re fortunate enough to have a full-time job, there are still ways to save when money is tight. For instance, make the most out of your employer’s 401(k). For the self-employed, you can turn to a solo 401(k) or SEP IRA.

Another suggestion would be to sock away any other extra paychecks or tax returns. If this isn’t possible, and you have spare time, you could pick up a second job. You could also look for ways to cut expenses, like canceling your Netflix subscription and putting that towards your savings. It’s not much. But it’s better than nothing.

6. The government’s got my back.

I hate to be the bearer of bad news. But I wouldn’t bank on this. Social Security may run out of money really soon. And, there’s actually a simple explanation.

“The reality is today, every dollar that goes into Social Security immediately goes out the door to current retirees. It never has a chance to earn a positive rate of return over time,” said Rachel Greszler, a senior policy analyst at the Heritage Foundation, a conservative think tank.

What about pensions? They’re also fading away.

As such, it’s totally up to you to fund your retirement.

7. I’m good. I’m contributing to a 401(K) and IRA.

“Retirement planning is not just about accumulating a retirement nest egg in the most efficient manner possible,” notes Ashwin Dhanesha, CPA, EA, CFP, PFS, CFA, MBA. It’s “also about how best to expend it during your retirement years so that it lasts your lifetime.”

“Remember, 401(K) and IRA are just two of the many available retirement saving vehicles that may be suitable for your situation,” adds Dhanesha. “There are many other savings, investment, tax, and other financial strategies, which may need to be employed to achieve your retirement goals successfully.”

Other retirement plans include pensions, Social Security, guaranteed income annuities (GIAs), profit-sharing plans, cash-value life insurance plans, and real estate investment trusts (REITs). Ideally, you want a blend of these so that your portfolio is diversified.

8. I’m rich!

Sure, you may be riding high right now. But, can you be 100% positive that you’ll be well off financially in the future? That won’t be likely if you can’t control your impulses, not following a budget, making risky investments, and only keeping your money in a savings account. According to one survey, you can call yourself rich once you have $2.3 million in personal net worth.

It’s always better to be safe than sorry. And, this is most true if you want to continue living your current lifestyle.

9. There’s a big inheritance coming my way.

“As the saying goes, a bird in the hand is worth two in the bush,” writes David Rae, a Certified Financial Planner?, in a Forbes article. “You may have wealthy parents, or you may not.” And, “if your case is the former,” just remember, again, that people are living longer these days.

“Therefore, it’s quite possible that you could reach retirement age before your parents pass,” states Rae. “They could also spend decades in retirement and spend down much more of your inheritance than expected.”

10. I’m nervous about retirement.

“Retirement can be scary, no matter who you are,” writes David Gellar in a previous Due article. “It makes sense that some people are nervous about retirement.” After all, you probably have millions of questions like:

• How much money do you really need for 20 years?
• What about 30 years?
• Will you get bored?
• Will you be lonely?

“Planning ahead and predicting the future is extremely difficult,” adds David. “It’s tempting to just make retirement planning tomorrow’s problem.”

Furthermore, “transitioning from earned income to portfolio income requires a major mindset shift,” says David. “No longer are you living off your paycheck? Changing your mindset from ‘work is living’ to ‘living is living’ is tough for a lot of people.”

And, for a lot of people, they view it as an “‘it’s all downhill from there’ situation, envisioning declining health, approaching death, and impending social isolation.” Of course, that’s not true as retirees often continue living fruitful lives.

Instead of using this another justification, embrace retirement by:

• Visualizing your retirement so that you can make the right choices today to shape your future self.
• Identifying your fears so that you can take steps to control them.
• Talking to people so that you learn from their successes and mistakes.
• Defining your life priorities so that you can find ways to pursue them.
• Figuring out what you’re really good at to add another income stream or have a purpose in your golden years.

11. I’m going to keep on working.

If you love what you do, by all means, keep on trucking. But, there will come a time when you can no longer do so. Maybe because you’re no longer physically capable or the market has forced your business to close. You have to consider these so that you can live comfortably when this is no longer viable.

12. I have no idea how much I’ll for retirement.

You’re not alone. 56% of American adults don’t know how much money they’ll need to retire. However, don’t let that stop. Especially when it’s not all that complicated to figure out how much you’ll need in retirement.

“Your first step is to determine what your retirement will look like,” writes Miranda Marquit in another Due article. Usually, this is based on your retirement goals, like where you want to live and what hobbies to engage with. You also need to admit that you will need some sort of long-term care, which can cost $225 a day or $6,844 per month for a semi-private room in a nursing home.

“Once you know what you want your retirement to look like, consider your monthly needs and cash flow,” adds Miranda. “Basing your retirement needs on what you expect to live on each month is a good way to break it down into something manageable.”

“I start with my current cash flow and expenses,” she says.”Look at your own. What are you doing now, and how much does your lifestyle cost each month. Research what the differences might be if you change things up a bit.”

You should also think about other situations. For example, will you downsize your home after your children leave? Do you want to relocate to a warmer climate?

“Once you have an idea of which items will cost less and which will cost more, you can determine how much you will need in retirement as it relates to monthly cash flow,” Miranda states. “You can then use that number to determine how much of a nest egg you will need to build to supply that.”

John Rampton is an entrepreneur, investor, and startup enthusiast. He is a founder of the calendar productivity tool Calendar. You can sign up for early access to Calendar here!

This article originally appeared on Due.