Fear can be motivating, right? ;)
Retirement and/or "financial independence" may be your ultimate dream, but too many of us are setting themselves up for failure. From not saving enough to not starting early enough, there are plenty of obstacles on the road to retirement.
So if any of these sound famliar, you may need to double down on your financial planning.
Reason #1 - Putting it Off
Procrastination just may be the number one retirement sin. The longer you put off getting started, the more you will have to save just to make up for lost time. The power of compounding is such that a mere 5 to 10 year delay in retirement planning could leave you with a nest egg half the size.
Let that sink in.
Reason #2 - Not Participating in Your Workplace Retirement Plan
SECURE YOUR PROFITS FOR GOODNESS SAKE. Stashing money in a TAX-ADVANTAGED 401(k), 403(b), IRA or similar workplace plan is one of the most effective, and certainly the simplest, way to save for retirement. If you are not participating in the plan, you are throwing away a prime opportunity to build long-term wealth and prepare for a happy retirement.
Reason #3 - Too Busy Raising a Family
It is only natural to want to provide for your family, but doing so at the expense of your own retirement is shortsighted and counterproductive. If your kids (or future kids) consider you a bank, it might be time to turn off the money faucet. Think of it this way - if you fail to plan for retirement, you could end up living with your kids – now that isn’t going to be fun for anyone. Right?
Reason #4 – Can’t Afford It
One of the most frequent reasons I hear from others about not saving for retirement is that they can’t afford it. You may think you don’t have any money to spare, but even a few bucks a week can make a difference when properly invested and left to compound for decades. Most times, you can start investing in your 401(k)/403(b) for as little as 1% of your salary, so there is really no excuse for not putting money aside for retirement.
Reason #5 - Afraid of Risk
In this case, risk is typically your friend (especially if you’re still years away from retirement). Investors who are afraid to take any risk in their portfolios may not get enough growth to retire happy and rich. If you have decades to go before retirement, investing money in the stock market gives you the best shot at growth. Yes, you will no doubt experience lots of ups and downs in the process, but the long term horizon makes it easier to build long-term wealth.