One of the most common retirement savings mistakes made in the US is the tendency of older workers to not contribute to their savings at all. Studies have shown that younger workers tend to max out their contributions nearly half again as much as workers over 50. Here’s why that’s troubling.
Younger Workers Making More Contributions to Retirement
It’s likely that this trend is due to media portrayals of retirement. Younger workers seem to understand that not enough people have adequate retirement savings, so they’re trying to make sure they’ll be taken care of when they retire. This could also be due to anxieties over the state of Social Security, and speculation that the social program won’t exist by the time some younger people retire.
Why This is Concerning
The sooner you start saving, the better. As soon as you get interest compounding on your side, you’re in a good position. This means that younger people see their money grow more the sooner they invest it. However, that doesn’t mean that older people shouldn’t be saving as much as they can for their retirement. When you’re closer to retirement, it’s as important as ever that you save up for your retirement.
What You Can Do
As long as you’re employed, you should be saving up for your retirement. When you get older and don’t want to, or can’t, work any longer, you’re not going to have the same income coming in that you did when you were younger. There’s no magical way to make money appear when you’re retired: you’re going to have to rely on Social Security and your savings.
Social Security isn’t enough to cover the average American’s expenses, let alone someone who has medical expenses. It’s unlikely that you’re going to have no medical expenses when you hit retirement age, so it’s incredibly important that you have a good sum of money saved up to draw on when you do retire. Save wisely, and start saving today.