Compared to the rest of the world, Americans work longer hours, and take fewer vacation days. Yet, we also retire later than anyone else in the industrialized world! Why is that?
There is no single, cut-and-dry answer to that question. Our relatively late retirements are probably due to a number of complex, interrelated factors. But one thing we do know is that more than three-fourths of Americans live paycheck-to-paycheck, 71 percent of us are in debt, and 10 percent of six-figure-earning households say that it’s hard to make ends meet.
So, it’s probably not difficult to imagine that many of us retire later simply because we can’t afford to retire any sooner. But why, if we’re working so hard and earning a reasonable income?
Many of us find it difficult to stick to a budget. Our concept of wants versus needs can be a little mixed up, and on top of that we face temptation everywhere we look. Plus, being so busy with work means that we often don’t have time or energy to analyze each financial decision. The end result is a whole lot of wasted money, particularly on these items…
Bank fees. We pay 17 billion dollars in bank fees each year! While some of those are unavoidable, fees for insufficient funds or overdrafts are caused by careless errors. And as management fees creep up, many of us don’t take the time to contest them, or switch to a new bank.
Late fees. Some of us waste hundreds of dollars per year on late fees, on everything from overdue library books or Redbox rentals, to late utility and credit card payments. Try automating payments and timing them with your paycheck deposits, to avoid late fees in the future.
Credit card interest. The average American household pays 1,292 dollars in credit card interest each year. That money could be earning interest in a retirement account instead! Make a plan to aggressively pay off credit cards, and avoid this type of debt in the future.
Forgetting to comparison shop. Many of us are charged too much on everything from airline fees and name-brand medications, to new cars and insurance premiums. Create a new habit of comparing prices on everything, and you’ll be surprised at how much you can save.
Failing to seek financial advice. The cost of missed opportunity, whether for investments or tax credits and deductions, can be steep. Remember to meet with us regularly, because experienced financial planning advice can save you money and spare you major anxiety down the road.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.