Most of us desire to retire one day. We want to be free from the need to work for financial survival. Over the years, I have met those who were older than the traditional retirement age, but were not able to retire because of past decisions. It is a sad scenario, often filled with regrets.
Millennials (those born between 1980 and 2000) have a tremendous opportunity. They have the time needed to set aside money for retirement. But a few bad decisions can derail a Millennial’s financial future. If you are a Millennial, here are five decisions that will ruin your retirement:
- Deciding to delay. For a Millennial’s finances, time is their best friend. If you start saving for retirement now, you will have time to weather the ups and downs of the stock market and take advantage of compounding. Every year you decide to postpone investing is another year you miss out on a huge opportunity to have significant dollars set aside for retirement.
- Deciding to be overly cautious. 2008 didn’t just hurt Millennials’ investments, it injured their belief that investing is wise. When 2008 hit, many Millennials had just started investing. For them, the lesson was clear—this was not the place for their money. But if you are to have enough for retirement, CDs and savings accounts won’t get you there. Take advantage of your 401(k) and other retirement account options. You need the growth that only the market can give you.
- Deciding that everything will be fine. Millennials must prepare as if there will be no safety nets. Social Security may not be around. That inheritance might not be worth as much in the future. You should not assume that retirement will somehow just work out. It can work out. But it will probably be the result of purposeful saving and investing.
- Deciding to spend on lifestyle your income doesn’t support. Spending too much on your current lifestyle leads to saving too little for your future retirement. Debt can crush your ability to prepare for retirement. Give first, then save, and, finally, determine what lifestyle is appropriate with the leftover money.
- Deciding not to care. Retirement seems far away. But in the blink of an eye, Millennials, like me, will be there. And there will be no do-overs. Though it may seem distant, Millennials should feel a sense of urgency about their retirement. The decisions you make today will have significant ramifications for your future.
With a few simple moves, you can get started saving for retirement. Participate in your company’s retirement plan. If they don’t have one, set up a Roth IRA and start contributing.
Try to make it automatic. Setting up a pattern of saving now will significantly benefit you in the future. If you are a Millennial, time has given you a tremendous opportunity. Take full advantage of it.
Written by Art Rainer, member of the Summit Stewardship and Generosity Ministry Leadership Team.The Summit offers a variety of stewardship classes to help equip you to become a faithful steward.Get resources like this one directly into your inbox by signing up for the Stewardship Ministry Digest.