Big Myths Surrounding Why People Don’t Plan for Retirement

Ask anyone about their retirement accounts and they’ll have one of two things to say. They’ll either tell you they’re working hard and saving as much as they can so they can retire early and well, or they’ll begin issuing excuse after excuse about why they’re not saving, can’t save, or definitely will focus on saving later. Retirement is a big deal, unless you’re not saving and can’t do it. Before you start judging those who aren’t saving, take a look at the biggest myths surrounding the lack of retirement planning in the United States.

Myth: People Can’t Afford to Save
Fact: People Choose Not to Save

It’s easy to say you can’t afford to save for retirement. It’s suggested you save at least 10% of your income for retirement. If you make $50,000 annually, that’s $5,000 per year. If you’re paid 26 times per year, you save just over $192.00 every paycheck. It might seem like a lot to someone who only makes $50,000 per year until you break that down. That’s just over $96 per week, or $13.70 per day. You probably spend that in coffee and lunches. People can afford to save for retirement, but they don’t because they focus on other things first.

Myth: Only Wealthy People Save for Retirement
Fact: Only Half of Wealthy People Save

In this situation, wealthy is anyone who brings in more than $50,000 per year. This is considered average income in the United States right now, and only half of the people who make more than this are saving and planning for retirement. The rest are ignoring it completely. It’s true that fewer people belonging to low-income families are saving, but those who make more also aren’t saving.

Myth: Young People Don’t Save
Fact: Young People Do Save

It’s easy to fall into the trap of believing it’s young people with the mentality that they can worry about saving tomorrow and have fun today who aren’t saving. It’s true many young people aren’t saving for retirement, but almost half of people who are close to retirement age haven’t saved yet or didn’t start saving early enough to allow them to retire well. Retirement planning isn’t just ignored by the young.

As the age for retirement gets higher and higher as the years pass, it’s more and more difficult for people to retire with the kind of money they need to live comfortably. Many seniors are on a tight fixed income unable to afford to live, and it’s devastating. Saving for retirement is crucial, and it’s time everyone starts doing it.