Don't know how to invest. Picking funds can be intimidating if you don't know much about investing. If you don't feel comfortable selecting an investment allocation yourself, make an appointment with an independent expert who can explain it to you and recommend choices appropriate for your situation. "Get on the phone with somebody who is objective and spend a little bit of time walking through it," says Peck. If you don't like your initial investment choices, you can always change them later.
Pay off debt first. If you have high-interest credit card debt or personal loans, it's usually a good idea to pay those off before funding an IRA. But if you have student loans, mortgage payments, or other low-interest debt, you may be able to get a better return by investing your cash. To figure out if it's better to pay off debt or save for retirement, compare the interest and fees you are paying on your debt to how much you are likely to earn on your savings. Be sure to factor in any 401(k) match and tax deductions or credits you will earn by saving for retirement.
It's too late. Some people in their 50s and 60s think it's too late to begin saving for retirement. But depending on when you plan to retire, you may have a decade or more to accumulate a nest egg. There are significantly bigger tax incentives for older workers to save for retirement than younger workers. Workers age 50 and over can contribute $5,500 more to a 401(k) and $1,000 more to an IRA than younger workers are allowed to. "In your 50s, you still have a good 10 or 15 years to contribute to a retirement plan, even if you haven't started already," says Peck. "It's better to start than to rely only on Social Security or your kids later on."