The steps to saving for retirement are very simple, but the discipline required to implement this common knowledge is often very difficult. We already know what to do, but most people aren’t very successful at taking action to accumulate enough for a comfortable retirement. Sometimes we don’t save because we make excuses and convince ourselves we don’t need to. Here’s how you’re holding yourself back from reaching the ultimate goal of a secure retirement:
Saving is sacrificing. Many people feel that spending less means giving up wants, but this is flawed reasoning that is keeping you from increasing your wealth. When you save, you are simply buying freedom your future self can enjoy. And with the beauty of compound interest, every dollar saved means many more dollars for freedom in the future. Those who give up cable TV aren’t losing a chance to see their favorite shows. They are gaining a few years of their life in which they will no longer need to work. Those who don’t buy new pairs of shoes every three months aren’t losing the ability to look good. They are going to look better because of less stress and fewer financial worries.
Everybody has it. Look around and you may feel like everyone else is living a dream life. They drive the car you want, live in the house you want to buy and even got the latest iPhone before yours arrived. But look more carefully and you’ll realize that not everybody has all the things you want. One neighbor may own a nice car, while another has a decked out kitchen. Sure, there’s always one couple with everything money can buy, but there are also countless others around you who can only dream about what you can already afford. Plus, the couple who owns everything may not be living a dream life either, because all they can see are those with even more than them. Our brain often fools us into longing for what we don’t have while completely disregarding what we already have.
I’m still young. Youth is not an excuse to delay saving for retirement. In fact, young people are in the best position of their lives to accumulate a large nest egg. Compound growth is a powerful wealth builder, but most people don’t realize the magic of time in the market until later in life. You are never too young to be thinking about retirement. Start saving today so the compound interest can begin to build. You will be glad you did decades from now.
I’ll implement the plan when all the details are perfect. Selecting inappropriate retirement investments or making financial errors can cost a considerable amount of money. It can be tempting to wait until you have fully educated yourself about all the possible options before you start investing your savings. But any time spent waiting only means your wealth has less time to grow. Plus, endlessly tweaking your plan and searching for the ideal moment to enter the market can backfire because the perfect plan may not exist. A good plan implemented trumps a perfect plan in the works every time.
I’ll call loved ones when I have time. Relationships take constant effort to nurture. You may feel like retirement has nothing to do with keeping up with those you love, but what’s the point of retirement if you have no one to spend your time with? If you don’t want to spend every day of retirement by yourself, you need to build relationships now. Pick up the phone and call your parents. Text your friends to see how they are doing, and meet up with those who are local to get closer to them. Living life in a community is the only way to reach a fulfilling retirement.
David Ning is the founder of MoneyNing.com.
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