10 Reasons You Will Never Be Able To Retire
Unless you are those lucky few who love their job and never work a day in their life because of it. You one day will want to retire. Sadly though the old ways are dead, more than dead. The days of working at a place that takes care of you when you get old and ensures you retire in style are long gone. They are so long gone that your parents will be finding out just how their chances of retiring are gone as well when they are nearer to retirement age and they will come to you for money. So why can’t you expect to retire than. Well here are a list of things that will stop you from even dreaming of retiring and lead you to be a greater at some large box store.
1. You don’t own a time machine.
Sounds funny but it is true if you didn’t start saving for retirement and investing when you were 16 your chances of retiring are dwindling every year you do not invest toward your future. I am exaggerating a little but the experts say you should start saving for retirement when you are 25 or younger. the money you save then will be far more valuable than any money saved later.
2. You are counting on social security for retirement.
If social security even exists when you are near that age it has never paid out much the average monthly payment received is only about $1180 with a maximum payment of $2600 for really high wage earners. I don’t know about you but $1180 is not enough to live off of and it gets worse since you will have to pay your own health insurance as well. “Oh but I will be getting Medicare?” You say sadly Medicare doesn’t cover everything and you have to get supplemental health insurance which costs about 500 a month today and will go up in the future.
3. You are counting on your 401k to make you a millionaire.
The 401k is a magical thing you put very little money in to it and through the magic of compound interest you make millions. What a nice fairy tale that would be if it wasn’t a load of crap. You see the 401k was a loophole designed to supplement a pension plan and allow a person so invested in it to retire with a little extra money. Right now the average amount of money in most peoples 401k who are 50 is about $25,000. There is no way that that will grow to a million by 60 so these people will have to work at Walmart as a greater if they want to make ends meet until they die.
4. Your employer does not offer a pension.
The pension was a great retirement plan you were guaranteed a certain percentage of your previous income if you worked a certain number of years at a company. This kind of security is unheard of now days. With the advent of the 401k employers saw an opportunity to get rid of the financial burden and risk of a pension plan and now pension plans are rare. Trust me though if you have a job with one and you like your job stay with it.
5. You live to your means.
You just got a raise but still you do not see much extra cash flowing in why is that? Well if you are like most people in our society you spend what you earn and rarely save anything. That extra hundred dollars a month goes towards eating out more or something else that while it is fun at the time does not secure your financial future.
6. You live above your means.
You had to get that 60 inch screen TV to watch the game but you don’t have the money to pay for it oh well put it on layaway. You look around your house and most of what you have there is owed money on. You sometimes have to take a payday loan out just to pay rent sometimes. This is a cycle that will only lead to more debt and eventually will lead to you being more broke and more miserable.
7. You have not diversified your portfolio.
You have money you put away for retirement but it only goes to one place. You are counting on one thing to secure your future. Normally that is your 401k but as stated before that is not the best retirement plan. You should be investing your money in various different money growing strategies some low risk others higher risk depending on how much you have to play around with.
8. You never accounted for runaway inflation.
Yes you planned for retirement and you have done most things right, but did you account for inflation. Yeah you are set right when your retirement hits, but with annual inflation rates as high as they are now how about 10 years past your retirement when your money just doesn’t stretch as far. In the last 10 years before 2016 inflation has risen 19.78% in the last 5 years it raised 6.68%. You have seen it prices are slowly rising everywhere you can’t get the same value as you used to. This is the difference that can lead you enjoying your retirement at first but then having to rejoin the work force later on.
9. You keep job hopping and never settle down with one.
This is common now days. It is common for one person to change jobs 10 to 15 times in their entire career. This job hopping does not lend itself to contributing to whatever retirement plan the job offers. So every time you job hop it is like starting from zero in saving for retirement. By the time you are retirement age you have nothing to show for your hard work because you are with a pretty new employer and either their retirement plan doesn’t work for someone who has not invested much time or there just isn’t much money in the plan to begin with.
10. You borrow against your retirement.
Need instant cash well fear not. Your retirement has tons of cash waiting to be used. All you need to do is pull out money now and all of your financial woes will be fixed. Never mind the horrible taxes and fees for doing such a thing and never mind that you are now robbing your future self. Most people do this at one point or another it seems to be a very common practice, but this is the other reason why most people do not have much money in their 401ks they took too much out thinking that it would just magically replenish.
Now that I have thoroughly depressed you I do have solutions to all of these problems, but that will be a later post. Until then know that there is a light at the end of the tunnel it just will take some work and forethought.