5 Reasons You Are Not Saving Enough for Retirement

How to correct these retirement savings pitfalls.

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A large portion of the U.S. workforce isn't on track to retire with adequate savings, according to a recent study by Hewitt. Here are five reasons that you might not be saving enough for retirement and how to motivate yourself to save more.

[See Avoid These 5 Retirement Investing Traps.]

 You don't take advantage of the best savings tools. You can set up automatic savings transfers or direct deposits to your tax-advantaged retirement accounts such as a 401(k) or IRA. Set it up once and you're done. These accounts help you delay taxes until retirement and they provide a savings barrier between you and your money. You'll think twice about raiding your retirement account if it will cost you a 10 percent penalty to do so. Strive to max out your allowed annual contributions to these accounts.

You only live for today. Are you letting the frivolous expenses of today get in the way of a more secure retirement later? To be able to save the 10 to 25 percent of your salary that may be needed for a secure retirement you will likely have to make some sacrifices. This means possibly using a budget to help you live within your means and saying no to that vintage sports car. A good way to avoid living beyond your means is to invest each of your raises as you progress through your working career.

[See Don't Let Job Loss Derail Your Retirement .]

You're too generous now. It may seem cruel to say it, but I think you should put your retirement savings needs before your kids’ college education expenses. Your children can take out loans or find another way to pay for college. Don't abandon your own retirement goals.

You overestimate retirement help. Social Security was never intended to be a complete solution for your retirement. The level of benefits delivered may be different from its current form by the time you retire. You can likely expect less help than your parents are getting.

[See How to Invest for Retirement Without a 401(k).]

You underestimate retirement needs. For most of us, it's hard to predict what life will be like in retirement. But that doesn't mean we shouldn't try. It's a good idea to prepare for the worst. When estimating your needs use a long life expectancy and high inflation rates and health care costs. I think the safest approach is to be ultra conservative with regard to your post-retirement income needs. When I make calculations I assume I will need at least 80 percent of my current income in retirement and factor in a long life expectancy. This usually produces a big number and scares me into thinking I'm not saving enough. When you have a surplus in retirement, you'll be glad you were extra cautious.

Phil Taylor is the author of the popular 52 Ways to Make Extra Money. Find out how to save more money and get the latest news on the best online savings accounts and the best online stock brokers at his blog, PT Money: Personal Finance.