15 Things That Will Prevent You From Retiring

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Retirement seems like something far off for many people, but it’s not as far away as you might think. You’ve heard for years that Social Security probably won’t be around by the time my generation retires and that saving for retirement as soon as possible is more important than ever before. Well, it’s true. You might want to retire, but these 15 things might actually prevent you from retiring.

Savings

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More than half of all Americans do not have enough saved for retirement. In fact, the numbers state that nearly 66 percent of Americans have less than $25,000 saved, including their property value and their net worth. This is the primary reason you might not be able to retire when you finally reach retirement age.  The best time to start saving is always now, no matter what age you are.

Access to 401K Money

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Nearly a quarter of all Americans will not be able to retire because they have so much access to their retirement money. When changing jobs, most Americans decide simply to cash out their retirement and spend it on paying down debt, traveling or upgrading their car or home. With such easy access to retirement funds, many Americans are spending it before they actually need it to retire and it’s just not there for them.

Cost of Living

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With the cost of living rising so rapidly and increasing so much, it’s making retirement almost impossible for most people. Many people today are saving for retirement to live the same kind of lifestyle they live now without accounting for inflation. What this means is that retirement funds available to you at retirement age will not be sufficient for you to actually retire.

Financial Worries

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With the job market so uncertain, the real estate market so crazy and financial messes in most people’s personal lives, many workers are unable to adequately plan for retirement. So many families are just trying to make ends meet, which means they don’t have enough to actually spend on saving for retirement. When it comes to choosing between a retirement plan and gas to get to and from work, people choose now over later.

Debt

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The recent economy sent millions into deep debt. With job loss at an all time high since the 2008 economic crash, most Americans are so indebted to their creditors they’ll never be able to retire. They spend so much on paying off debts now, they won’t be able to afford to save for retirement and they won’t be able to retire because they’re too far in debt.  Best way to pay off debt?  Don’t get into debt in the first place!

Lack of Emergency Funds

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Again, this has to do with people not saving enough. Most people don’t save. Those who do tend to have one savings account, and it’s for both the future and emergencies. There are always emergencies. Someone always needs new tires or a tune-up on a broken down vehicle or something of that nature, which means you are spending your savings to fix them. It usually ends up being a wash. You need a emergency fund so that you don’t have to touch your savings.

You Don’t Know How Much to Save

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The biggest reason so many people will not be able to retire is that they simply have no idea how much money they need to save right now. Most people have no idea what they need, and that will leave them living on less than a quarter of a million dollars for the rest of their lives. It might sound like a lot, but when it’s divided into 15, 20 or even 30 years, it’s not very much.

Social Security Problems

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The issue with Social Security is that no one knows if it will be around in another 30 years. Most people think it will be depleted and the government will not be able to pay people what they owe them. If you’re counting on your Social Security to get you by, you might be in a pickle when retirement age rolls around.  You need to set your own retirement plan with the assumption that Social Security won’t exist when you retire.

Health Care

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Right now, seniors are worried about health care costs. They’re unpredictable and mostly just too expensive. Even with the Affordable Care Act, many still cannot afford health care, which means they will be living in further debt at a certain age. This makes it difficult for many people to retire, because they’re scared to lose their health benefits that go along with their current careers.

False Security

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Once you no longer have to drive to and from the office, school functions for your children and purchase work clothes, you won’t need as much money, right? Wrong. Most people are falsely secure in the fact that they’ll be spending less on work and school-related items and they fail to plan for that. You still need a significant income to retire, and most just won’t have it because they think they’ll be able to get by on less.

Delayed Retirement

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Some people assume they’ll be able to work part-time doing something enjoyable once they retire. This is not always the case. Some people are going to have to retire unexpectedly. Some people will be given early retirement packages from their jobs and others will be too sick to work. What if your spouse needs round the clock care after a stroke or heart attack? People do not plan for the fact that retirement might mean not being able to work at all.

Lifestyle Changes

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One of the biggest reasons you might not be able to retire is the fact that it will change your lifestyle too dramatically. While a simpler lifestyle might seem great for some, it’s not going to be great for others. Many people don’t want to give up traveling, shopping and hobbies just because they’re retired, which means they won’t be able to do it.

Increasing Ages

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The retirement age has increased significantly over the past few decades. People used to be able to retire with full retirement benefits at a much younger age than they are today. If this keeps happening, people my age (30s) may never be able to retire. Death might actually come first because the retirement age is so old people simply don’t live that long.

You Need the Money

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Most people who have already reached retirement age and have yet to retire simply state that they need the money their job provides. This is true because of rising healthcare costs, rising cost of living, rising debt and increasing lifestyle choices. It’s a simple fact all rolled into one big statement; people can’t retire because they can’t afford to for a number of reasons.

Housing Debt

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Another big problem for those who want to retire but may not be able to is housing debt. Most people assume they’ll be able to retire without a mortgage because their homes are paid off. However, with the economy the way it is, more people than ever before are paying more for homes they should be paying less for. They’ve refinanced, taken out second mortgages, moved dozens of times and simply never thought to purchase a home because it’s not affordable. This kind of housing debt might make it impossible for you to retire.

The other issue is that even if a retiree sells their home is where will they move next. Rent prices are skyrocketing along with home prices, so for many seniors it makes sense not to sell their home.

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