1) I Don’t Make Enough Money.
This is certainly true for some people. But I bet you can find money to invest if you track discretionary spending -usually those dollars spent on unnecessary items. Even small savings over a period of time beats not saving anything. The goal should be to increase your savings rate periodically and understand that you do make enough money to do at least a little something.
2) My Employer Doesn’t Match.
The greatest benefit for most employees in a 401(k) plan is not that the company match or the tax breaks. It is the fact that savings take place automatically each pay period. Very few workers have the discipline to save outside the plan what they would be able to save through the plan. Even if your employer does not match is not a good reason to not participate in the plan. You have to save for retirement anyway so why not take advantage of your employer’s retirement plan. By the way, most of those plans do match!
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. 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. The goal is to enter retirement with zero or small debt obligations.
4) My Job Doesn’t Have a 401(k).
If you have your own business and are self-employed with no employees, you are able to make contributions to multiple sources of retirement accounts based upon the earnings from the business. If you have employees, a Simple IRA account may work. If you’re not self-employed, a Roth IRA account is something you make want to take a look at. In these accounts, you should consider automatic monthly withdrawals from your checking account into your IRA account. Remember, you are sole responsible for your retirement lifestyle. Don’t you dare leave it up to the government or anyone else. You’ll be sadly disappointed.
5) The Economy is Bad.
Saving for retirement is for the long term, and a down economy is just a part of the business cycle. Even during market fluctuations it is important not to suspend your contributions; instead make sure your assets are diversified to protect you against market fluctuations. The fact that the economy is bad now should not prevent you from contributing to your retirement, provided you have at least a five-year period before you need the money. The goal is to buy low and sell high.
6) Retirement is Decades Away, I Can Wait.
Time is the most critical element of investing. Regardless of how much money you have, it is so important to start as soon as possible with any amount you can. Time is more important than how much you put away, because time has much more of an impact. The sooner you start the greater the amount that will come from investment income. The longer you wait, the more you will have to contribute from your pay later to reach your goal. A dollar today is worth more than a dollar tomorrow.
7) Social Security Will Provide.
Social Security was never designed to be the sole source of retirement funds. It was designed to supplement. Right now the average benefit is $1,153 a month, which is less than $14,000 a year. That’s right above the poverty line. Is that enough to maintain your lifestyle? Contribute as much as you can NOW to your employer’s retirement plan, increase your personal savings NOW, and by the time retirement rolls around, that’s when Social Security will be a welcome compliment.