Can everyone save for retirement and why not?

Observations on life, Retirement 4 comments

The following was written by AI – with my modifications. It’s not bad, but misses a few points.

Keep this basic concept in mind. Save (something) first and always avoid credit cards or pay the balance in full every month. Spend the balance anyway you like. That is your standard of living.

Not everyone can save for retirement. There are many factors that can make it difficult or impossible to save, including:

  • Income: People who earn low incomes simply don’t have enough money left over after paying for basic necessities to save for retirement. BUT THERE IS STILL SOME opportunity for low income to save. There is always discretionary spending to look at.
  • Debt: People who are in debt, such as student loan debt or credit card debt, may feel like they can’t afford to save for retirement until they’re out of debt. PERHAPS, but that rationale may mean too much delay.
  • Cost of living: The cost of living has been rising steadily for many years, which makes it more difficult for people to save money. CUTTING BACK is an option for almost everyone.
  • Financial illiteracy: Many people don’t know how to save for retirement or don’t have the time or resources to learn about it. I DON’T BUY THAT.
  • Lack of motivation: Some people simply don’t see the point in saving for retirement if they don’t think they’ll live long enough to enjoy it. THAT’S QUITE SAD.

Even if someone has the means to save for retirement, there are still many reasons why they might not do it. Some of these reasons include:

Valid Excuses?❓

  • They don’t think they need to save. Some people believe that Social Security will be enough to support them in retirement, so they don’t bother saving. However, Social Security benefits are not guaranteed to be enough to live on, especially if you have a long life expectancy. 😢
  • They don’t know where to start. Saving for retirement can be a daunting task, especially if you’ve never done it before. There are many different types of retirement accounts to choose from, and it’s not always clear which one is right for you. 🙄
  • They’re afraid of losing money. The stock market can be volatile, and people are often afraid of losing money if they invest in it. However, over the long term, the stock market has historically outperformed other types of investments, such as savings accounts. 🤑
  • They’re not disciplined. It takes discipline to save money for retirement, especially when you’re living paycheck to paycheck. It’s easy to put off saving for retirement when there are other expenses that seem more pressing. 😱

It’s important to remember that everyone’s financial situation is different. What may be impossible for one person may be possible for another. If you’re not sure if you can save for retirement, talk to a financial advisor. They can help you assess your financial situation and create a plan that’s right for you.

4 comments

  1. https://images.squarespace-cdn.com/content/5b0ef0d48f51305493a96721/1569099259666-8V89KP4NT1ZMH82ZI1E0/Us_Key+Art_Wordmark+%28Stacked%29.png?format=1500w&content-type=image%2Fpng

    Interesting that, according to several sources, about half of Americans have no retirement savings at all. And, apparently, over seventy percent die in debt. You can’t take it with you.

    Humble Dollar, Quinn, and, apparently Clark Howard are a big help for the rest of us.

    I was just contemplating the stinkin’ rich. How do they prepare? Surely they don’t invest fifteen percent of income like many of us do. Aside from the eccentrics, is there a more or less standard protocol for protecting or growing generational wealth?

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  2. There is not enough emphasis on explaining the big advantage that the low income folks have over the higher income people – ZERO percent capital gains rate on investments vs higher income tax rates on savings. Plus compounding this advantage over time. These two facts, along with spending less than you earn, are the keys to building wealth for a low income person.

    “If you’re not sure if you can save for retirement, talk to a financial advisor.” AND reduce your returns, just as front-end load funds effect on your wealth? Unless one takes on the personal responsibility to learn quickly from that financial advisor so they can begin DIY sooner rather than later making the front-end load effect of the advisor cost short lived, else they will be farther in the hole.

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  4. AI is doing a credible job. A lot of students will have more free time.
    I can think of some more reasons that may be valid for not investing for the future. These may or may not have been hinted at by AI.

    One is youth. There is a time when old age and retirement is just so far in the future that one doesn’t imagine it happening to them.
    Two is coming from a
    background of family ignorance of investing. They have no concept of investing or what it is and how to go about it. The stock market is for the rich.
    Three is listening to advisors such as insurance salesmen and suddenly have all disposable income tied up in whole life insurance.

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