When it comes to saving for retirement most people are pretty good at coming up with excuses as to why they can’t save for retirement right now. There’s the mortgage, the cost of raising kids, just not getting paid enough at work, need a new car, need to remodel the house, putting it off until they are older, don’t know how to invest, the stock market stinks right now, need to pay off the credit cards, really want to a buy a new (fill in the blank) first. I’ll admit it saving for retirement is not that easy. Especially if you haven’t been in the habit of saving before. It’s kind of like trying to get to the gym and exercise to lose those extra 20lbs you put on. There never seems to be enough time to get around to it and in the beginning it can be pretty overwhelming and you are likely to be fairly unsuccessful starting out so most people either never start or quit shortly after.

Despite somehow being lucky enough to understand some of the big pricture at a pretty young age, I too found myself using some of the same excuses as to why I didn’t start saving for my retirement right away. I didn’t know what the hell I was doing or where to start and the stock market in 2002 was down like 40% over the previous 3 years. I told myself I would wait until the stock market started going back up before I put any of my hard earned money into it. I mean it made perfect logical sense, why put my money in now if its just going to go down, certainly I would be better to wait and not earn any money rather than lose money. Well had I started in 2002 I’d have probably been presently surprised with my returns as the stock market went up nearly 30% that year and 10% in 2003. Regardless I didnt get involved until halfway through 2004 when I started my first Roth IRA after spending countless hours at Fool.com learning as much as I could about investing. By the way I am a huge fan of the Motley Fool and don’t think there is another resource on the internet where a common person can learn what they need to know about saving for retirement.

What I believe will make me a successfull investor
Well I am sure glad I started when I did, as regardless of how well I invest my money the next 30-40 years I believe that when I look back this will be the single most important factor in any success I have. I started. Like anything, the thing that makes most people successfull is that they actually go ahead and do something. So many people have the knowledge or the great ideas, but they never act on them. I’m starting to realize that you don’t always need to know everything or have the best idea in the world to be successfull, everyone has the potential to be successfull. Just very few people act on their potential.

Obstacles facing me today
When I do my planning to acheive my goals I know what it will take for me to reach them. For the most part its not rocket science and there are many free tools on the web that will help you determine what you need to sock away each year in order to acheive those goals. Problem is most people (especially older people) look at the figure and determine that it’s just not possible to put that much away right now. Well guess what the longer you wait to act, the bigger that number is going to get and the harder it is going to be to acheive. Every year you put off saving for retirement the harder it is going to be to get where you want to be. For me personally I could probably come up with as many excuses as anyone as to why I can’t save for retirement.

  • I’m only 26 - no one my age is saving for retirement, I’ve got decades to save for retirement yet
  • I just bought a new house this last year - I have to worry about a mortgage, HELOC, and don’t even get me started on the energy bills here in WI this winter
  • I just had a kid this last year - Have you seen the figures on what is costs to raise a kid, not to mention the soaring costs of college education
  • My wife comes from a family of 11 ! What if I have to support a dozen kids :-)
  • We only have one source of income - my wife stays home to raise our son - probably better to wait till the kids are raised and she is working, then we can really get on that retirement thing.
  • That new house we bought, well we have no furniture for it, all the walls are plain old white, the basement was already half-way finished off when we bought it, we have no landscaping, we don’t have an entertainment stand for our TV, everyone else in the neighboorhood has cement driveways and we have gravel - certainly we should work on some of these things first.

I could probably go on for quite a while with my list of excuses. I’m also pretty confident that I would not have to work too hard to convince most people that those are perfectly legitimate excuses for not being able to dive full bore into retirement saving. The problem is if I am looking for excuses as to why I should put off saving for retirement I am likely to find them in abundance.

If on the other hand I can just get started and give my financial independence the priority it deserves I can flip the tables and start looking at reasons to save and not spend money. Very few people sit down and think to themselves if I buy this new car instead of investing the money for my retirement, that’s another 5-10 years I need to spend working at the office instead of retiring early and sipping margaritas on some exotic beach in the Bahamas. There aren’t too many people who wouldn’t mind retiring in their 40s, just few people take the time to sit down and figure out what it will take to accomplish this. If you start early enough you might be suprised at how easy it is.

I guess if I could just give on bit of advice when it comes to saving for retirement it would be to start now. Regardless of how much money you currently have to invest, how the market has been performing, or regardless of how much you know, just start. You don’t have to know everything right away or have thousands of dollars to put away, but if you can just get started it becomes infitesimally easier to build on what you have started.

Technorati Tags: