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By: Stuart Ritchie

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September 18th, 2017

Why you might never be able to retire

Financial Planning

[Estimated reading time: 3 minutes - While you wait for a barista to make your coffee!]

There are 5 problems that prevent people planning for retirement – are they holding you back?

Overcome them and invest in your future today, and you stand the greatest chance of having the retirement of your dreams.

Here are the 5 problems potentially holding you back – and how to overcome each of them.

1. Procrastination

Procrastination is the number 1 reason preventing people planning for retirement...

Research by professor of psychology Joseph Ferrari reveals procrastination stems from negative emotions that hijack our mood.

To overcome procrastination, psychologist Travis Bradbury, author of Emotional Intelligence 2.0, suggests instead of punishing yourself, take a moment to reflect and figure out why you’re procrastinating, remove those obstacles, and then jump right in.

So, turn your to-do list face down, tune out all demands on your time, and address your future right now.

Procrastination is the number 1 reason preventing people planning for retirement

2. Confusion

If you don’t know where to start – and you don’t know where you need to get to – you’re not alone.

81% of Americans surveyed on retirement readiness by Merrill Lynch admitted they had no idea how much they needed to save to retire.

More worryingly, another survey, this one from the National Institute on Retirement Security, revealed half of US households have no retirement savings at all.
This blog contains 6 exceptional resources to get you started, and reveals how you might even be able to retire sooner than you thought – as long as you start planning today.

3. Instant gratification

You might think spending money right now is more fun than investing it for the future…

But research shows that the more materialistic we are, the less happy we are…

Bearing this in mind, consider also the findings of the Stanford marshmallow delayed gratification experiment

It found that children who can wait longer for preferred rewards tend to have better life outcomes.

Therefore, if you defer instant financial gratification by prioritising saving over spending, you’ll not only be happier today, you’ll enjoy a bigger and better payoff in the future.

Spending may seem more fun than investing but this will prevent you from retiring

 4. It’s too late

Psychologist Jonathan Hefner, who specialises in financial and legal counselling, explains that:

“No matter how much [or little] you have saved, you can take steps to build a more secure future.  These range from reducing your expenses to taking advantage of changes in tax laws…”

In a paper for the University of Notre Dame in Indiana, he shares tips for catching up with your savings, gives ideas about how to get help building a financial plan, and demonstrates why it’s never too late.

5. I can wing it

You might be able to wing a supermarket trip without a list, but you cannot wing your way into retirement without a plan.

Yet that’s exactly what the majority of people surveyed by JPMorgan Asset Management may have to do.

Their survey found that while half of respondents wanted to retire before the age of 65, only 20 percent had realistic plans in place to enable them to do so.

Mike Alfred, CEO and co-founder of Brightscope, a US company dedicated to bringing transparency to the financial services marketplace, states the obvious when he says that the amount of savings anyone commits to their pension is the single most important factor when it comes to building up a realistic retirement pot.

But, as he reveals:

"Most people aren't saving enough money.  In the absence of saving an adequate amount there is no other magic bullet.  You can choose the best investments in the world, but if you’re only putting $500 a year [into a pension] … you're just not going to get there."

Winging it, hoping for the best, and failing to carefully plan are not ways to run a successful business, lead a happy life or build a realistic retirement fund.

Don’t leave investing too late,

Don’t leave your retirement to chance,

Do tackle the issue head on today…

 

 

 

About Stuart Ritchie

Stuart Ritchie is a Chartered Financial Planner, Chartered Fellow, and Pension Transfer Specialist.

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