Over and over we are told to save for retirement. The necessity and priority are not some secret knowledge only a few are entitled to. From the time we enter the workforce, and sometimes prior, the necessity of saving for retirement is stressed.
As an incentive, the federal government has created all sorts of special retirement savings accounts with odd names, such as 401k, 403b and 457. These accounts are tax protected, which means they are not subject federal or state taxes. On top of this, it is not uncommon for employers, particularly private companies, to offer some type of match when you contribute an account.
Saving for each of us is a choice, just as consuming is a choice. The choice to consume is easy, while the choice to save takes restraint and control. From the time we enter the workforce and progress through our career, it is easy to deffer saving for retirement to a period when we make X dollars annually.
As life progresses and our income rises, new obligations come and, if we’re lucky, some of the old obligations go away. These obligations put strains on our cash flow and the resolution of obligations free funding to be reallocated.
If retirement savings is never made a priority, then it will never occur. Continually saying that the savings will occur once we reach a certain amount of income is simply a rationalization to ourselves and to others as to why we are not saving now.
A million opportunities exist for us to spend our money. It’s not as if we are going to reach a certain income level and realize that we have exhausted the variety of goods and services we can spend our money on.
If retirement matters, then we will take the time to save for that future day. If it does not matter, then we will give lip-service to the idea, but never engage in contributing towards the future and continue to work to death.
Many financial decisions are made in the month of January based on resolutions and the time people take to reflect on where they want to be by the end of the year. Don’t let saving for retirement take a backseat for another year.