If you are like a lot of people out there, you hear the word “retirement” and you aren’t exactly overwhelmed with feelings of confidence and security. In fact, more and more people are feeling they are late to the accumulation party.
Sometimes, when I am late for an event, I wonder if I should even bother going at all. I focus so much on those first few minutes that were lost, that I forget about the hours that are still left to enjoy.
I think a lot of people can revert to this kind of thinking when it comes to starting a retirement plan later than they had hoped. I’m here to tell you to change out of the sweatpants and get your party dress back on. It’s time to hustle like the white rabbit to the tea party.
Sure, you’ve done well over the years. You’ve made a good income, lived comfortably, and made some great memories along the way. But you know deep down, you haven’t saved nearly enough.
It is a very common scenario for people to reach their late forties and fifties, and realize they have cracked, scrambled, and devoured what probably should have been their nest egg. The things people tell themselves in this situation can be depressingly grim. Language like “It’s too late”, “I’m going to have to work forever”, or “I’m too far gone” are usually untrue.
The biggest challenge in meeting clients who are nearing retirement and have neglected to plan is often not the numbers or their situation. It’s their mindset.
Henry Ford said “Whether you think you can or whether you think you can’t, you’re right”. If you continue to tell yourself that it is too late and your retirement dreams are a hopeless case, that is exactly what they will continue to be.
If this resonates with you at all, here are a few common and counter-productive mindsets that could be holding you back.
“I want to live my life now, not later”
“Later I may not have my health”, “I work so hard I deserve to enjoy this” or my favorite “You only live once”. These statements are all true. To a point. They are not however, excuses to neglect your savings.
In a society where everyone is pushing for life and time balance, there is little to no financial balance in most people’s lives.
You “may not always have your health”, so do yourself a favor and save for that trip. Just because “you work so hard and you deserve to enjoy life ” you shouldn’t have to keep paying for those experiences after they are over. And “you only live once”, but you may also live a long and healthy life so maybe you shouldn’t spend like there’s no tomorrow.
“I can’t afford to save”
I think most people that say this believe it. But is it really true? Or have you just become comfortable throwing yourself a pity party? You may have created a lifestyle expectation that eats up your income and keeps you from saving. It’s not uncommon to see a big mortgage, holiday trailers, and ATVs take priority over retirement savings.
Most people don’t legitimately have an income problem when this excuse comes up. The income is there, it’s just misdirected.
“It’s too little too late”
Whether you haven’t saved a stitch or you’ve accumulated a bit of something, working with a professional can help you uncover solutions you didn’t know were available to you. In fact, what you feel might be too little, too late could possibly be a completely workable situation if it is well executed.
“I’ll collect government benefits or rely on my pension”
More often than not, people will grossly overestimate what they are entitled to.
And if you are hoping to depend on government benefits, it is very unlikely you will have enough to live on. The monthly benefits can be a nice supplement to an already existing plan, but they won’t stand on their own.
The next time you catch yourself thinking about retirement, pay close attention to what you are telling yourself. How is that working for you?
Chances are, if you are late to the savings game you are going to need to assess your priorities and make some sacrifices. There may be some tough decisions ahead. It might look like giving up a holiday, adjusting your lifestyle, or gasp…. adhering to a budget to make significant contributions to a retirement plan.
Just keep in mind that just because you are a bit late to this party, it’s still an event you won’t regret showing up for!